The impact of post-COVID-19 on the world we know today remains a mystery. The virus, which is now a global pandemic, has brought the global economy to a standstill. As part of the international containment strategy, drastic measures have been implemented to limit mass exposure and spread. Borders are closed, sporting games and major events canceled, even large and small businesses shutting down, and furloughing their workers has been common. Despite the unreasonable demands, everyone has complied to save lives.
However noble the new measures are, many businesses are staring at financial ruin. Which in essence means no work, no income. For most small and medium-sized enterprises the COVID-19 crisis has tossed them to the brink of insolvency. When mired in these trying situations, most small businesses experience high attrition rates. Losing your most valuable employees can be devastating. It doesn’t hurt to restructure financial incentives and underlying benefits to keep them on the job, but for how can you keep doing so?
What to do as an SME when forced to hit the restart button.
Re-negotiate the tenors of current contracts
If there are pending performance contracts bound to mature within the next 6 months, now would be a great time to start discussions on their overextension. Whether the contract is backed by a letter of credit or a bank guarantee, engage the concerned party on the same. That way you can shelter your SME from financial ruin that will arise due to performance risk.
Get an extension on your working capital assessments
Get an extension on the holding period on debtors and inventory. With the right approach, you can have it stretched throughout the current lockdown. As an SME you can request banks for temporary extension periods on your debt and inventory levels. This will ensure continued liquidity and prevent a cash crunch.
Tave advantage of government business assistance resources
Most governments and financial institutions across the world have unveiled financial relief programs to cushion their economies and small businesses. Be up to date on what they are and apply for any that meets your business criteria. If your company or business is registered in multiple markets, take advantage of that. For instance, you can explore what benefits Canada offers to your business, while also tapping into a stimulus package in Dubai for your operations in that market.
Minimize on spending
Any spending that is deemed as unnecessary should be done away with. Cancel any small or miscellaneous payment that does bring no direct financial benefit to the business. You can adjust your office into a ‘hot desking’ scenario while working from home and saving on travel. Carefully manage your cash flow and invest your focus on getting those contracts signed. All these measures will convert online interest payments into sales.
As an entrepreneur, your company is the biggest asset. If you cannot run your business as you wish, improve your skills by taking those online courses. Regularly update your portfolio with podcasts and informative material. This helps you and your workforce gain valid skills as life gets back to normal.
Revamp your website
Has your website been laying there stale and empty? Now is the time to give it a reboot. With most people at home just browsing their phones or laptops, now is the time to revamp the content and attract a ton of new visitors. Work on website improvements such as downtime, usability, features, and the blog section.
Now is also a great time to share what your business does to the world. If you are in a position to, invest in digital marketing, do so. Unfortunately, many companies may have frozen their marketing departments altogether. From a strategic point of view, now would be the best time to aggressively jump on the PR wave. Three ways you can focus on are:
- Brand awareness
- Using thought leadership articles
- Pushing online sales
Re-access business promotion decisions
With the new social distancing measures, a lot of strategies previously employed will be rendered impracticable or unusable. For instance, if the business had planned a tradeshow or in-person marketing, it will not be as effective as one that was solely on digital.
By digital approach, I am referring to SEO, Social media, and email marketing. A Google Adword campaign would be ideal, however, you can use SEO which is equally effective.
Go for online offerings
If you lack a store or any digital booking here is a strategy. You can evaluate the prospects of your company through the use of webinars, virtual business conferences, published newsletters, among others. That way you can ensure your business remains known to other players as you anticipate a post-lockdown world.
Create a 3-month financial plan
Most small businesses have 3 key expenses. They are office rent, employee salaries, and utility bills. Other expenses will depend on the industry you operate in. Have a chat with your landlord and suppliers and come to an agreement on how you can spread out your costs. During this global pandemic, they will be understanding of the situation as the success of your business is also in their interest. Prioritize cost-cutting by spreading out your costs.
Invest in your employees
Where possible, maintain your best staff and stick with the team that offers the best support. Give your current staff adequate training and skills to keep them engaged and productive. Several online courses have waived the user charges to allow more people to enroll for their certification courses while at home. The upside to upskilling is improved performance and worker output when everything gets back to normal.
Explore ways of cutting costs
As we have seen earlier, office staff and office rental charges are your biggest costs. Do a freeze on hiring new full-time staff and instead rely on freelancers. In worst-case scenarios, downsize the office and opt for an open-size space that’s more affordable and flexible in terms of payment.
Take care of yourself
Exercise good hygiene, eat right, and exercise. Taking care of your physical well-being keeps you calm and content. When faced with difficult choices, achieve some balance before making any drastic decisions. If there is a need for emotional support, now is the time to explore that.