Surviving The COVID-19 Lockdown:- Unless you have been living under a rock, you’ve probably heard about the COVID-19 Pandemic and how it has led to a global shutdown. Various measures including quarantine, travel restrictions, and social distancing are being implemented to protect public health. The world is crippled with such unprecedented times where even the markets have plunged to their record low.
With plenty of curbs in action as part of the COVID-19 management interventions, the hotels and eateries are no longer bustling with a crowd, roads are deserted, no one is traveling, and shopping malls are empty. Businesses are facing a major slump, imports and exports are down, consumer and business spending has taken a downward spiral due to reduced sales of products and services. The grinding halt brought about by the Pandemic has left the startups and the MSME’s on tenterhooks.
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The Challenges Being Faced by Small Businesses
The COVID-19 induced lockdown which began on March 25 and is likely to last till May 3, is affecting the business sector in one and more ways irrespective of how small or huge they are. The worst-hit being the small size business models which are grappling with several challenges including:
- Temporary closure of business setups to follow social distancing
- Disruptions in supply chain
- The loss of revenue has resulted in an inability to pay monthly loan installments, rents and electricity bill amounts for the ongoing period
- Reduced demand for products and services due to social distancing
- Reduced cash flow which has led to salary deductions and laying off of employees to save money
- Shortage or lack of workforce who are mostly daily wage earners, being the rural migrant population who is on their way to their homes in the village areas of the country
- Partial or complete exhaustion of revenue particularly for small and medium scale businesses
A survey by Local Circles lends support to the stated challenges for a small business owner in the present situation. The survey which covered SME’s and startups located in over 90 districts in the country found that 27% of the small businesses and startups were already short on cash and had dried of any funds while only 6% said that their funds would help bear their monthly operational costs for the next 6 months. Another 20% of the respondents feel that they are likely to face a cash crunch in less than a month.
The survey underlines the grim reality that points towards permanent or temporary closure of some of the small and medium scale businesses in the country. It revealed that 61% of the respondents were thinking of scaling down their business in the next 6 months due to the fall out caused by COVID-19. While a small 7% were expecting to shut down their enterprise, 13% were looking to cease operations. On the contrary, a meager 13% are of the view that they might see some growth in the future in their work.
Survival Strategies to Be Adopted
COVID-19 had nudged the business setups to shift and switch to newer operational methods. To protect the future of startups and small business companies, businesses need to navigate between financial and operational challenges. These include safety and security risks, hampered productivity, reduced workforce, difficulty making key decisions among others while adjusting to the needs of consumers as they practice mandatory quarantine and social distancing within the confines of their homes.
Here we have compiled some valuable information that can help meet the emergency needs of small businesses. These include:
01 Follow a Work from Home Policy
Safety is the utmost priority in the wake of a Pandemic. Hence, make sure everyone in your organization follows the standard protocol as recommended for workplaces as precautions against the disease. The most important one being effectively practicing the work from home policy to ensure social distancing and quarantine during the lockdown.
02 Ensure Effective Communication Practices Within the Organization
Businesses need to effectively communicate with their employees on the current status of their business. These are testing times for everyone and hence it is essential to stay connected. Making use of various video conferencing platforms provided by ZOOM, Facebook, and Google Hangouts can help keep employees engaged, and the work running. Be compassionate towards your employees to keep their spirits high.
03 Keep the Stakeholders Updated
With so much to deal with, the lockdown necessitates the need to keep all the stakeholders from those at the top to the ones at the bottom of the ladder. Everyone including the investors, consumers, vendors, suppliers, employees, and experts must be informed about the position of your business in the market.
Ensure there is transparency between all the parties involved and everyone is aware of the impact of the lockdown on the business. This may lead to a retraction of investments but once the crisis subsides, everything will eventually fall into place. Also, keeping everyone informed will prevent any animosity which may arise as a result of the delay in the payments.
04 Plan Well
Cash flow is the foundation of every business and the primary question haunting every entrepreneur during the lockdown is around the availability of enough capital to last them till the market is back on its feet. While some might be having more than enough money to last them for a year, some might struggle to survive even for a few days. Thus, to keep their business running, entrepreneurs need to reevaluate their strategies and track their expenses.
It is important to cut back on additional subsidiary expenses and concentrate the expenditure only on the essential needs of the company. Preparing better strategies can help make key decisions regarding sales and marketing costs to reduce expenditure. Reviewing strategies, revenue goals, financial credits, bad loans to assess the situation of the company. Implementing proper planning and evaluation may even help your business bounce back once the pandemic subsides.
05 Go Digital
As people are homebound, it is likely to impact the sales and consumption of products and services. To ensure uninterrupted consumption, a host of businesses can launch themselves online and make sure the workflow is smooth.
- You can keep your services active by providing them online if they preferably fall in the category of items that have been given relaxation during this lockdown period. For instance, if you are a store owner, you can make your services and products available online with the option of a contactless delivery while practicing better safety techniques.
- Go online if your services include tuitions, fitness classes, health, and wellness. In case you are a fitness trainer, you can use the various video conferencing platforms and provide online classes.
- Create social media accounts to stay in touch with the consumers who are resorting to the use of social media to kill time during this lockdown. This will help create visibility even while you are not serving the consumers. You can engage in active conversations on social media with your consumers and stay connected with them while answering their queries.
As the world gets engulfed in a recession, businesses need to revamp their operational strategies to allow them to settle to the new norm while not compromising on their sales.