5 Key things to ensure speedy business revival for SMEs and MSMEs post COVID-19
Factors every SME/MSME needs to keep in mind
Even as the fight with COVID-19 continues, conversations around the economic impact post the pandemic have become ubiquitous. While governments and international economic bodies have already planned strategic measures to combat the slowdown with modifications to monetary policies, rate cuts, loans, and waivers, etc., trade and business communities across the country are concerned about their business post the lockdown and are in the various planning modes of positivity. The pandemic and the resulting lockdown have especially impacted the SME and MSME sectors, which operate on tighter credit and cash flow constrain.
While it is only natural to expect a tough future in terms of business after the COVID-19 lockdown, it is not an impossibly difficult situation to tide over, as many believe, when the going gets tough, the tough get going. If anything, the lockdown can help us learn important business lessons that can help us not only survive but also thrive and be well prepared for any other crisis that might come our way in the future.
Listed here are 5 key factors every SME/MSME needs to keep in mind after resuming business post the lockdown:
Financial Assessment and Security
This is the first concern for every business, be it small or big. In the case of SMEs and MSMEs, it is important to first make a final assessment of the current financial situation of the company. One may sit down with the CA and finance team to understand deficits, future inflow of funds, potential expense, and liabilities, etc., and draw up a fresh 3/6-month plan of action. At this point, getting reliable and accurate information about government relief packages, financial support initiatives and support extended from trade bodies like CII, etc., and getting a clear picture from investors is vital before planning and executing a financial strategy.
Once these entire financial risk assessment and support ecosystems are in place, one can execute the plan. This may involve deciding on a potential pay cut, pull back on investments related to infrastructure or expansion, halting new recruitments, etc., which then need to be effectively communicated and put into action.
Re-evaluate business plan
Based on the financial assessment, risks, and revival strategy, it is important to re-evaluate the business plan form the pre-COVID times. Assessing the current situation, one needs to redefine business goals and plan a more realistic, and well-rounded growth plan that can be immediately executed. At this point, it is vital to have all stakeholders, senior employees and department heads as well as external investors, to be involved and come to a mutually agreed set of new targets. This may be a 3 month/6month or an annual growth plan, depending on the company’s current financial situation and may include deferring funding rounds or accelerating PE funding or even forming new collaborations/business partnerships, which can help achieve the renewed business goals.
Create a strong Digital Ecosystem
If one thing that the COVID-19 has taught businesses, it is the power of digital engagement! Even as an SME or and MSMSE, it helps to be present and active on the digital media, through the website, blogs, and social media. Not only does it help create a positive brand recall but it also helps generate business through channels, especially for brands that are into retail, who have benefited impressively through online sales.
Apart from online sales, a consistent and positive social media presence can prove a boon for consumer and stakeholder engagement, not only in times of social distancing and lockdown but long after that as well. Additionally, a digitally enabled internal ecosystem also needs to be in a place that can accommodate remote working or work from home scenarios, without compromising data security or productivity of employees.
Adopt the Fourth Revolution for Business
Apart from being present and accessible on the digital platform, this is also the time to leverage the new age technology innovations and adopt the 4th Revolution for your business. While most SMEs and MSMEs look at this as an ‘out of league’ investment, it is actually very simple and can be incorporated for a higher ROI in the long run.
Be it automation, CRM, ERP, IoT or ML, a well-planned strategy to scale to a technology-enabled, highly productive, a next-generation business can be worked out with a 2-5 year plan. This is vital to be implemented on an urgent bases post-COVID as it will help gain an advantage above completion, which would be looking at short term growth goals, and also help effectively mitigate the future business crisis.
Put a crisis management strategy in place
Taking lessons from the recent crisis, it is vital to chalk up an effective crisis management plan that will take into consideration both immediate and long term impact. Hence, from creating a financial back-up and reservoir of funding, to have a robust digital and technology-enabled ecosystem that can ensure minimum damage to productivity needs to be in place. While most businesses are prepared for an internal crisis like fire, theft, etc., albeit at a preliminary level with insurance policies, one also needs to have a solid bounce-back/business revival plan in place, keeping in mind average days of work lost, impact on revenue, liabilities and outstanding, etc.
Some of above measures might be viewed as additional costs/expense at a time of an already tight financial situation, especially for SME’s and MSME’s who are cash strapped, the measures mentioned above are vital points for survival and an effective bounce back for businesses, keeping long term growth and planning in mind.
This article is written by Agnelorajesh Athaide, Serial & Social Entrepreneur, Co-Founder and Chief Mentor of The Business opportunities club (BOC), Real Estate Developer, Educationist, Angel Investor & Motivational Speaker.