.st0{display:none;fill:#936037;} .st1{fill:#936037;} How not to lay off a single employee and grow in a crisis Read more
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A year ago, the coronavirus came to Russia. Since then, many businesses have closed or impoverished. But there are examples when the crisis served as a growth driver. One of such examples was our company «Verf». I will try to explain how it was possible to achieve such success.
What is Vefr at the beginning of March 2020? This is a small family business: 65 employees, each of which is maximally involved in our lives. We are in a stage of active growth. The introduction of quarantine was a shock for us, as for everyone.
We send all production to homes, managers work remotely. Sales drop to zero. What will happen next is not clear.
Our team
For our company, the most important thing is people. Therefore, the thought of not paying salaries did not even exist for us. When everyone was sent to self-isolation, there was a slight panic among the workers. They understood that most companies would not pay salaries to their employees. In the end, it did.
People were afraid to be left without a penny, because they are often the only breadwinners in the family. This is another reason why we did not even consider such a move.
We weekly wrote in our working chats all the relevant information and our decisions on further work immediately after the speeches of the President. We openly published all our actions taken to improve the position of the Shipyard.
Now, looking back, I understand even better: the openness that is already inherent in Verf is the only right way to preserve the team and employee loyalty to the company.
Our sales
As I said, in the first days, sales collapsed. And here, to be honest, it was very dumb. The fear was based on two things: a misunderstanding of how long it would last and what it would lead to — whether people would have money. After all, it is clear that our products are not essential goods.
The main feature of the production company is that it is very difficult to quickly cut the bones. The main costs that we have are fixed costs (salaries, rent). And it is impossible to reduce them in our system of values. Therefore, we were able to reduce costs by no more than 20% — due to the absence of any purchases due to the suspension of production.
We had a financial cushion, which, in those scenarios, would have been enough for about 2 months. We had two ways out of this situation: either reduce or increase sales. Since the first option contradicted our settings, we chose the second way.
At a time when everyone was cutting advertising costs, we only increased them. Both in our main sales channels — social networks — and in the opening of new channels. We began to actively invest in contextual advertising, immediately investing about 1 million rubles in it.
By the third week of quarantine, sales began to recover and it was clear that life goes on — both for us and for people.
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Our production
As you probably understood, our value is people. And these are not only employees, but, of course, our customers. We have a very loyal audience. During the quarantine, our commodity balances fell into the red, because the production did not work, that is, the products were not produced. Despite our warnings, customers were ready to wait two months for Verf’s products. And it was cool!
By the time we started production, we had -1000 products. And not a single customer refused his package. Thanks to this, we finished June with the best results compared to the previous year: 9.8 million versus 7 million rubles.
In order to cover the resulting deficit and meet new obligations to customers, we needed to expand. And then the market came to our aid.
We have a rather narrow sphere and employees of different companies communicate with each other. Everyone knew that we were paying salaries in full. Usually, the acquisition of production is difficult due to a banal lack of personnel. But in the current situation, there were many who wanted to change jobs. People who had not received a salary for two months lined up to us, and we took the best. Thus, at the end of August, Verf grew to 90 employees. And by the end of the year there were already 140 of us!
What lessons have we learned from the crisis? Even if you panic, don’t show it 🙂 But, seriously, the most important thing is to be honest with people and with yourself, and also not stop looking for opportunities.
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