Small enterprise confidence index reaches finest rating since 2013
The increase in the confidence of micro and small businessmen was influenced by the expectation of improved trade in the short term. Anyone who wants to take advantage of the increase in sales in the coming months will have to invest in good strategic and financial planning for the business, advises an expert
In the month of August, micro and small entrepreneurs once again showed greater confidence in the improvement of the economy, according to the MPE Economic Survey, carried out by Sebrae in partnership with Fundação Getulio Vargas (FGV). Last month, the Micro and Small Business Confidence Index (IC-MPE) registered an increase of 2.7 digits and reached 100.6 points, considered the best score ever recorded since 2013.
According to the researchers, the increase in the score was driven by the improvement in Trade expectations in the coming months of 2022. The index is the result of the combination of two more sectors: Services and Manufacturing Industry. Only the Trade index increased by 5.4 points, while Services reached 0.5 point in the month and Industry fell by 1.4 point. It is the second consecutive drop in this sector.
Despite the better score, the Survey indicates that the business situation in the Commerce sector changed only 0.1% in August, indicating that the economy in the country inspires care. And one of the attentions that business entrepreneurs of all sizes – especially micro and small – is in the preparation of a strategic and financial plan that can handle the moment of instability that the national economy is going through.
According to the specialist in Finance and Strategic Planning, Marcone Morais, the financial success of a company is closely linked to what was defined in the business plan. “Financial success is linked to sales of the product or service that you are willing to deliver. But, selling a lot does not necessarily mean a positive result at the end of the period, so we need good strategic and financial planning”, he reinforces.
According to him, the planning needs to provide for consistent studies on revenue and revenue expansion in a line of products or services, analysis of the seasonality period, if any, the market niche that one wants to reach, knowledge of the competition and the target audience. “Among others, I understand that these are the main information that a company needs to have to ensure its success”, he says.
Cost reduction does not always guarantee greater profitability
Marcone Morais adds that one of the mistakes that many businesses make in the search for better profitability is to reduce production costs, without a detailed analysis of the implications of this for the business. “Reducing production costs is not necessarily just about buying cheaper raw materials, as many companies are looking for. Among other ways to optimize production costs, we can reduce waste, seek better labor, improve execution processes, reduce equipment maintenance, among others”, he advises.
The expert explains that cost reductions made without planning, such as choosing cheaper or lower quality raw materials, can result in losses in the face of competition. “Today, competition is very strong, the amount of products or services offered is enormous, and we must always seek to gain more in production, since, at the final sale price in the market, margins are getting smaller and smaller, so success can be there, at the best production cost”, he says.
Reduction of fixed expenses can also help in positive business results
Another factor that can influence the best invoicing for companies, and that can be described in the strategic and financial planning of the business, is the search for the reduction of physical expenses. According to Marcone Morais, a planned reduction in the bills that the company has to pay every month can be the difference between having a good time in months with less revenue or ending up having to close the deal due to economic challenges such as the one generated by the Covid-19 pandemic. “As this type of expense occurs regardless of sales volume, it has to be an important target for good cost management of the business as a whole”, she advises.
The expert also advises the adoption of the so-called 3Ps data use strategy: people, processes and products. “Quite simply, the objective of the 3Ps method is to know the priorities of the business through the alignment between these three points, knowing how to strategically seek this information and adapt it within the company, because with balanced financial management and good planning strategic, the chance of success grows exponentially”, concludes he, who has 12 years of experience in the area of Business Administration.