The beginning of the second half of the year brings an interesting moment in the agricultural market. Many companies are starting the execution of the second semester planning and are already preparing for the market trends that are coming. For example, we know that many of the companies in the market are eyeing the window of opportunity with the possibility of locking in the Dollar for the 2022/23 crop and avoiding a possible post-Election drop, along with the earning capacity with corn that is in the process of being harvested and needs to be sold.
It is evident that the strategies for safrinha corn via hedge protection and operations to lock the dollar on soybeans are just examples, but they show the importance that financial planning has for increasingly better results. And this ends up applying to different sectors and companies: pet food, food service, metallurgical, fertilizers, among others. Whether to correctly map the production costs, or to adopt strategies aimed at reducing risks and greater control of the allocation of resources needed for the operation, such as storage capacity and raising capital.
However, this basic premise is sometimes left aside and can generate irreversible consequences for the company. Thus, in the following text we will talk a little more about one of the pillars of financial planning and show you some reasons why it is essential to understand the company’s costs and know how to invest the resource in the correct means. Read on!
Management attentive to improvements
When a company operates in the market, it is necessary that it has employees who are aware of the improvements that can happen along the way to solve possible losses in the initial investment in a certain sector or product.
This financial and strategic management needs to be thorough and know every part of the macro and micro workings of the organization. In this way, it is interesting that everyone recognizes the role of this team for the good functioning of the whole system.
With this, it is possible to point to improvements that need to be made in order to avoid loss of capital and for resources to be optimized and used for what is, in fact, on the right track. This organizational culture in the finance sector is also becoming more and more necessary in the competitive and frequently changing marketplace.
Knowing in detail the cost-benefit of the company
One of the basic and initial aspects to understand the importance of resource management is to know what within the company generates a cost-benefit ratio and what does not fit this principle.
The cost-benefit is nothing more than the result, whether monetary, time, resource, etc., that a company has when balancing what it has invested and what it will have in profit. This mathematics is done to calculate from the labor of an employee, to how much will be invested in raw materials to formulate a product, for example.
We realize, therefore, that having the clarity of the cost-benefit of the company’s expenses and investments is fundamental for the good functioning of the work, isn’t it? In this financial management and control, it is necessary to detail everything that goes in and out of the company, so that the balance sheet is complete.
Escalate productions
To perform a resource optimization that really generates a significant result for the company, it is necessary to know that in some moments it is necessary to scale up the productions, that is, to increase the investment, so that the return is also greater.
However, to get to this stage of the procedure it is not enough to just put more money into something that can be profitable. Market analysis, risk analysis, financial potential and return analysis are fundamental before any step is taken.
In this sense, the analysts can indicate, together with your financial and strategy team, which are the most appropriate paths to take and how soon the return on investment will start to be felt in the company’s overall finances.
Change the strategy when necessary
The great virtue of having a broad vision for resource management is to be able to foresee problems and change course when necessary. This is because the market is volatile and some events can generate consequences in your company.
An example of this is the pandemic of COVID-19, the Russia-Ukraine conflict, and the oscillation of the main price-forming asset in Brazil, the dollar, which slowed down the production of inputs in various sectors.
However, to be able to do this, it is necessary that the organization has an attuned team that is able to propose solutions even before the problems come knocking on the door. This ability to change strategies shows that the cost-benefit with a team prepared to propose, simulate, and adopt differentiation strategies and alternatives in adverse moments is very high; after all, it is not advantageous to maintain an investment in a scenario that proves to be unattractive or doomed to failure.
Investing with assertiveness
There is no point in your company making investments without a proper market study that informs about the advantages, the disadvantages, the possible profit, the risks, among many other essential factors.
To do this, without management, is to take an unnecessary and extremely stressful risk, since it can be something that generates an expense that the company’s finances are not prepared to cover.
Using resources responsibly and assertively should be a priority for any manager who wants to increase profits and investments in the company he or she runs. This includes making the analysis of which purchase or investment is ideal for the moment the company is going through and how the market has been reacting recently.
Having a broad vision for business, as well as the ability to analyze the market, makes your company grow more and more and avoids losing money with risky investments.
So consider assembling a team and using digitalized tools that will optimize the time and money of everyone involved in the company’s health.
