Not many scenario plans would have accommodated for 2020. Nevertheless, prepping for upturns and downturns should remain a big part of your new-year planning. For Stacey Kent, founder of Berlin-based sustainable furniture company Kentholz, moving to Melbourne and a remote management role mean that mapping out scenarios for 2021 is essential.
‘I’m doing a lot of planning,’ says Stacey from his workshop in Berlin’s industrial Treptow district. In practical terms, that means modelling various scenarios based on average sales for the previous six to nine months, writing budgets and trying to construct five different scenarios.
Though it’s a bold move, relocating won’t drastically alter his furniture business Kentholz’s functioning. After the shock of the pandemic, the company saw a spike in online sales, and it quickly set up an outsourcing framework enabling the skeleton team using the workshop to handle the extra business.
Kentholz, which started out in 2014 with dining tables custom-made from reclaimed alpine oak and pine, has branched out into terrazzo flooring, which is hand cast in the Treptow workshop. But with the wood and metal now produced elsewhere, Stacey’s freelance team of 10 is already set up for working hundreds of kilometres apart.
Part of Stacey’s scenario planning includes the facility for regular readjustments as he goes along. ‘We have our yearly schedule where we map out how we’re going to play things over six- and 12-week periods,’ he says. ‘We’ll run Google Ads but pull them after three days if they don’t get a strong reaction.’
For Kentholz, being able to respond to what 2021 brings – good or bad – may well depend on its ability to pivot, plus its product diversity. ‘We’re going hard on the home office, with a desk at a cheaper price that’s flat-packable and can be delivered in four weeks,’ says Stacey. ‘If we want to sell more wood but nobody’s coming forward, we can fall back on the terrazzo. It’s good that we’re at this size where we can turn things around quite quickly. It doesn’t take a huge amount of revenue to go from a bad month to a good month.’
‘Worst case would be shrinking by 20-30% in revenue.’
‘The second worst would be going along with the same sort of revenue and costs.’
’The middle point would be minimum growth, about 15-20% for next year.’
‘The fourth would be where we hope to be, which is about €550 to €600k revenue next year.’
‘The dream scenario is where we bust it wide open and get to something like €700 to €800k revenue.’