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A way forward for small businesses post-pandemic: Prepare now to avoid panic later
The external forces are not within the reach of any individual, however, there are things that can be controlled and measures can be taken to sail through the crisis.
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businesses during covid
The COVID-19 pandemic has inflicted financial havoc around the world, leaving many aspiring entrepreneurs and small business owners besieged in its wake. In the days to come, the situation is likely to deteriorate even further as the global economy shrinks to as low as the worst since the Great Depression of the 1930s. The global crisis has affected every business differently. However, some managed to shift to a remote work model, whilst the rest adjusted operations or shut their doors entirely.
As much as 88% of organizations have introduced work from home and almost 91% of teams across Asia-Pacific are working in the said arrangement since the outbreak. Where the early months of 2020 promoted extensive shutdowns, the world is now looking to begin relaxing these stringent measures slowly, safely, and sustainably. Clearly, businesses of all types and sizes, especially small ones, need to navigate the complex process of rebuilding and evolving, and ponder upon how they will adapt and resume “normal” life.
Undeniably, the future, too, possesses a tremendous amount of uncertainty for those who run smaller businesses, leapfrogging into a world that embraces profound changes seems like the only option. Owners of small establishments are typically too busy running their day-to-day operations to completely prepare for the hit, but unfortunately, they are the ones who have the least buffers than large-scale firms to weather long-term crisis. Already, many small companies are facing the effects of the lockdown on supply chains, investments, international pricing, labor, and customer traffic. And the shoe to drop for small-scale business owners was and continues to be the effect on the workforce. Since the start of the outbreak to date, staffing has remained a major challenge, and thus, it’s recommended that the spear-headers of these businesses start preparing now.
These external forces are not within the reach of any individual, however, there are things that can be controlled and measures one can take to sail through the crisis to start new.
- The first and foremost thing to do is to take a close look at the business plan. For the owners, the early-stage business model may have reaped good results pre-COVID-19, but to get out of it means some fine-tuning needs to be done. Specifically, the focus must be placed on how the business can pivot to fit into a new normal. If in the past, you had opted for a reactive approach, you may have to shift to becoming proactive in order to set your foot in a vulnerable market. Let’s take, for instance, if you previously functioned in a brick-and-mortar model for sales, you may need to consider a digital expansion to reach out to a larger pool of audience. In fact, a giant market player as Flipkart has already reportedly partnered with over 37,000 kirana stores in India, out of which, 12,000 fall into the authorised BuyZones category and 25,000 in last-mile delivery activities; thereby offering standalone as well as large format stores the chance to reinvent themselves.
- The second step in developing a rebuilding plan for the pandemic is determining to what extent your small business has been impacted. If you haven’t had a chance to update your financial statements of late – it’s wise to do that now. Besides the hard numbers relating to cash flow, profits, and losses, look at other ways in which your business has been affected. Considering the harsh reality of minimal margins that small businesses are forced to keep, the priority in the near future should be to amplify the pace of sales and recovery of bad debts.
- An organization, small or big, holds no value without its employees. Due to vulnerability, insecurity, and uncertainty, your staff is most likely to be exposed to conflicting material and may be confused or anxious. Communicate clearly and effectively, and importantly, ensure informing them of new policies and business transitions, if any, in a balanced fashion. Let your employees, staff, and vendors know if they continue to be on permanent payroll or short-term contracts. Meanwhile, as many as small to mid-sized companies have already begun salary cuts in the range of 20 to 40% starting April 2020. Many experts have warned, it could take years before ratios of employment return to those seen prior to the pandemic. One way to pacify this phase is by creating a hub of information that employees can refer to and maintaining transparency within the organization.
- Make sure plans and policies are clear and everyone within the company is aware of what authorisations are needed. Prepare revised plans, if needed, for a shorter period, spanning 3 to 6 months. Re-look at the key business contracts to comprehend cancellation clauses. Interruptions from the pandemic may enable suppliers to cancel contracts without any penalties. Here’s when insurance policies come into play. In scenarios like these, a business interruption insurance might also not apply.
- Starting again can never happen successfully if you do not learn from your past mistakes. Create a contingency plan in advance for the next crisis. For instance, build up liquid cash reserves for your business if you had absolutely nothing or very little set aside before the coronavirus outbreak began. The current pandemic may have also taught you a few things about how critical it is to be able to keep your business fluid so you can seamlessly weather storms. Like, if in the past, your employees weren’t given the option of working remotely, now is the time to incorporate that facility in your business model.
Normalcy won’t take place overnight. In fact, the “new normal” for you and your business may look very different from what it appeared before the pandemic. Your journey back to the stable business you had may take several days, months, or even years, but all that can be done is to keep learning, evolving, and growing as the new world restores.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.