Impact of Steel Sales on Small Businesses and Your Wallet

Steel Sales Decline: What's Happening?

According to Valor Econômico, the National Institute of Steel Distributors (Inda) forecasts a 1% decline in flat steel sales among its members this year. This situation worsens with a 1.4% retraction already recorded until August. Micro and small enterprises, which are the focus of these distributors, are facing a challenging market, with the loss of competitiveness of the national industry and the pressure of high-interest rates.

An interesting aspect is that distributors serving small and medium clients feel the effects of this crisis more slowly, due to their more diversified customer base. This means that while the impact is imminent, it may take time to arrive. However, the combination of high-interest rates and low consumption is a clear sign that it’s time to prepare.

Why Does This Matter to You?

If you are a micro or small business owner, this decline in steel sales can directly affect your cash flow. The majority of debtors in Brazil are small businesses, with debts totaling R$ 206 billion. The pressure from high-interest rates is making it increasingly difficult to obtain credit, which can hinder investments and the acquisition of essential materials for your business.

For example, if you need to buy R$ 10,000 in construction materials and can't get financing due to high rates, this could delay your projects and impact your revenue. If your business depends on steel consumption, it’s crucial to plan your purchases and assess credit needs.

Concrete Actions You Can Take

• Reassess your budget: With market uncertainty, review your monthly expenses. Use the 50/30/20 method to organize your finances: 50% for needs, 30% for wants, and 20% for savings and investments.
• Build an emergency fund: Ensure you have at least 3 to 6 months of expenses saved to face downturns. This can prevent you from falling deeper into debt.
• Seek alternative credit sources: Consider specific credit lines for small businesses that offer more competitive rates, but do this cautiously and always compare options.
• Negotiate with suppliers: If you have a good relationship with your suppliers, try negotiating better payment terms to ease pressure on your cash flow.

Connecting with Financial Organization and ADXIS

In times of economic uncertainty, keeping your finances organized is essential. The ADXIS platform can help you monitor your spending, plan your budget, and build an emergency fund, all based on the 50/30/20 methodology. By staying informed about market trends and understanding how they impact your business, you better prepare to face challenges and seize opportunities.