ORGANIZATION AND PLANNING IN PERIODS OF ECONOMIC INSTABILITY

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The uncertainties inserted in the economic environment as a result of the COVID-19 pandemic have influenced the perception of national and international investors, increasing risk aversion. In periods of stagnation, or economic depression, as may occur, feelings of concern and discouragement (or even despair) are very common. However, it is essential that entrepreneurs have the vision “of the glass half full” to focus on strategies and actions capable of guaranteeing the financial health of the business. Careful and responsible pragmatism is one way out for entrepreneurs to guarantee long-term stability and growth. As in all crises, companies that manage to survive the moment of economic chaos will certainly emerge stronger. However, most of them are facing challenges resulting from the COVID-19 outbreak, such as the sharp drop in commercial and productive activity, interruption in the supply chain, and especially, a drop in demand/consumption. Several measures must be closely monitored by entrepreneurs in order to guarantee business prosperity and can be found in the article CASH FLOW AS A DECISION-MAKING TOOL FOR THE UNCERTAINTIES OF COVID-19.Considering the macroeconomic environment in which companies operate, the Government will be a fundamental part of guaranteeing the liquidity of several companies in the most diverse markets of operation. Over the past few days, several packages of emergency measures have been released to help companies and provide liquidity to the market, the main of which are:

Source: CNI

Source: Federal GovernmentIncentive and assistance measures by the Government will be constant in the coming days and months. It should be noted that changes may occur in the measures highlighted above, so it is essential to monitor closely and always be up to date. Regarding the private sector, the five largest banks operating in Brazil have also begun to adopt measures to make life easier for their clients. The Brazilian Federation of Banks (Febraban) reported that Banco do Brasil, Bradesco, Caixa Econônica Federal, Itaú Unibanco and Santander announced the possibility of extending the debts of their individual clients and micro and small businesses for 60 days. In addition, measures aimed at facilitating credit are expected to be announced, especially for SMEs. The Central Bank announced measures on 23/03 that will increase the liquidity of the National Financial System (SFN) by R$ 1.2 trillion. According to BACEN, the objective is to ensure that financial institutions have the resources to meet market demands. In addition, the capital release measures generate an expansion potential of R$ 1.16 trillion in the economy's credit volume. This provides security to the system for financial institutions to maintain and expand their credit concession plans. President Roberto Campos Neto pointed out that the National Financial System is well provisioned and has good liquidity.

Source: BACENOpportunities for renegotiating debts and raising funds for working capital are examples of immediate liquidity. Thus, some development banks, such as the Minas Gerais Development Bank (BDMG), are already updating their main Working Capital lines for more affordable rates and for a longer term, following the new guidelines of the Central Bank (BACEN).

Source: BDMGIn these moments of instability, headlines, reports, and articles about the macroeconomic situation are always the focus of attention. However, there are many opportunities to create value and build wealth. Warren Buffett's famous recommendation “never waste a good crisis” has never been more present and entrepreneurs must be prepared to optimize their asset portfolio through investment opportunities, mergers and acquisitions (M&A), Cost Reduction, Operational Innovations and Fundraising in order to obtain significant returns over different economic cycles.ARTICLE WRITTEN BY PEDRO FENATI — PARTNER OF FC PARTNERSGo to our site: http://www.fcpartners.com.br 

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