Stress Testing Your Business

Stress testing is a means to measure the resilience of a business when subjected to unexpected shocks that force operation well outside what would be considered operational limits. There are three variables that produce a wide, and sometimes unexpected, range of outcomes.

  • What is the range of revenue or margin declines that are low probability but conceivable? Indian River uses a client selected range that goes down to a 60% decline.
  • How long will the test conditions continue and how will they return to ‘normal’ operating limits?
  • How comprehensive is the cost reduction program and how effectively is it executed?

Most firms develop their cost reduction plans in tiers that are triggered by progressively worse operating conditions.

Indian River Consulting Group Pandemic Revenue Index (PRI)


The distributor Pandemic Revenue Index provides a qualified weekly view into how other distributors are doing with respect to revenue declines as the pandemic progresses. The PRI is based on a sample group of distributors that have agreed to share their weekly sales data with Indian River Consulting Group to provide this resource to the industry. Here is the latest data:

IRCG Pandemic Revenue Index March 30 April 3

Click to view latest weekly results

 

Weekly Pandemic Review Index Updates

Distributor Weekly Pandemic Revenue Index (PRI): March 16-20, 2020

Distributor Weekly Pandemic Revenue Index (PRI): March 16-20, 2020

Distributor Weekly Pandemic Revenue Index (PRI): March 16-20, 2020

The Indian River Consulting Group Pandemic Revenue Index (PRI) of distributor sales compares sales each week with their same week in the prior year. The Index is based on data from many distributors across multiple lines of trade we have invited to participate.

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Distributor Weekly Pandemic Revenue Index (PRI): March 23-27, 2020

Distributor Weekly Pandemic Revenue Index (PRI): March 23-27, 2020

Distributor Weekly Pandemic Revenue Index (PRI): March 23-27, 2020

Each week, we’ll be tracking a snapshot of year-over-year distributor revenue with our Pandemic Revenue Index (PRI). Here’s the latest graph.

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IRCG Publishes Free Cash Flow Modeling Spreadsheet for Distributors

IRCG Publishes Free Cash Flow Modeling Spreadsheet for Distributors

IRCG Publishes Free Cash Flow Modeling Spreadsheet for Distributors

The tool has been put together as a resource for distributors who have not developed the projection tools that will allow them to act early as events unfold related to the current COVID-19 global health crisis.

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Distributor Weekly Pandemic Revenue Index (PRI): March 30-April 3, 2020

Distributor Weekly Pandemic Revenue Index (PRI): March 30-April 3, 2020

Distributor Weekly Pandemic Revenue Index (PRI): March 30-April 3, 2020

Each week, we’ll be tracking a snapshot of year-over-year distributor revenue with our Pandemic Revenue Index (PRI). This week’s index shows a 13.6% sales decline over the same week in 2019, which is an improvement over the prior week’s index.

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Access Now: Distributor Response to COVID-19 - 04/10/2020 MDM On Demand Recording

Access Now: Distributor Response to COVID-19 - 04/10/2020 MDM On Demand Recording

Access Now: Distributor Response to COVID-19 - 04/10/2020 MDM On Demand Recording

IRCG Managing Partner Mike Marks joins Modern Distribution Management for another live webinar event on how distributors can respond to the COVID-19 crisis.

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Distributor Weekly Pandemic Revenue Index (PRI): April 6-10, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 6-10, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 6-10, 2020

Each week, we’ll be tracking a snapshot of year-over-year distributor revenue with our Pandemic Revenue Index (PRI). This week’s index shows a sales decline over the same week in 2019 of 29.4%, which confirms that the improvement in the prior week was an anomaly as we expected. 

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Distributor Weekly Pandemic Revenue Index (PRI): April 13-17, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 13-17, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 13-17, 2020

This week’s index shows a sales decline over the same week in 2019 of 6.9%. Although the sales decline is much lower than previous weeks it is likely that this is not a reflection of significantly improving business conditions.

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Distributor Weekly Pandemic Revenue Index (PRI): April 20-24, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 20-24, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 20-24, 2020

This week’s index shows a sales decline over the same week in 2019 of 14.8%.  The sample size for the week of April 20-24 is 10 firms, which is an increase of one over last week. Incorporating the new participant’s historical data into the index caused some minor changes to previous weeks’ values.

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Distributor Weekly Pandemic Revenue Index (PRI): April 27-May 1, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 27-May 1, 2020

Distributor Weekly Pandemic Revenue Index (PRI): April 27-May 1, 2020

This week’s index shows a sales decline over the same week in 2019 of 18.9%. The sample size for the week of April 27-May 1 is 10 firms, which is the same as last week. Of the 10 companies in the survey, nine saw declines versus last year with a maximum decline of 43%. We now have six weeks of double-digit average declines.

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Distributor Weekly Pandemic Revenue Index (PRI): May 4-8, 2020

Distributor Weekly Pandemic Revenue Index (PRI): May 4-8, 2020

Distributor Weekly Pandemic Revenue Index (PRI): May 4-8, 2020

Each week, we’ll be tracking a snapshot of year-over-year distributor revenue with our Pandemic Revenue Index (PRI). We would like to increase the sample size and are asking you to consider helping the industry through these uncertain and unprecedented times.  If you are interested, reach out to Mike Emerson, at memerson@ircg.com.

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Distributor Weekly Pandemic Revenue Index (PRI): May 11-15, 2020

Distributor Weekly Pandemic Revenue Index (PRI): May 11-15, 2020

Distributor Weekly Pandemic Revenue Index (PRI): May 11-15, 2020

This week’s index shows a sales decline over the same week in 2019 of 14.9%. The sample size for the week of May 11-15 is 10 firms, which is the same as last week. We now have eight weeks of double-digit average declines and five consecutive weeks with declines in the mid-teens.

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Distributor Weekly Pandemic Revenue Index (PRI): May 18-22, 2020

Distributor Weekly Pandemic Revenue Index (PRI): May 18-22, 2020

Distributor Weekly Pandemic Revenue Index (PRI): May 18-22, 2020

This week’s index shows a sales decline of 11.4% over the same week in 2019. The sample size for the week of May 18-22 is ten firms, which is the same as last week. We now have nine weeks of double-digit average declines. The 11.4% decline represents the smallest decline since mid-March.   

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Video: Stress Test Your Business in Times of Crises

Resources on Business Stress Testing

This kind of business issue has been a core part of our consulting business for decades. Often, it was getting a distributor out of financial challenges when they still looked fine from the outside. This page and the content that it will eventually contain is part of our payback to our industry for supporting us over the years.


See resources linked on the right.

Access the recording of the recent live discussion with MDM on the impacts of COVID-19 on distributors.


Expect more, including the following, in the coming weeks:

  • We will be doing webinars on how to stress test a distribution business. They will be recorded and available in the public domain for anyone interested after April 3.

Questions? Reach out to us today.