How Micro and Small businesses should prepare for post COVID 19 world
With over 2 Lakh & rising Coronavirus cases and restrictive measures such as social distancing, the road to economic recovery seems bumpy and improbable. Although the Union government has been relaxing norms in a phased manner, the uncertainty around COVID-19 treatment continues to dampen the country's economic resilience. Also, this threat looms over millions of organized and unorganized workforce that the micro and small businesses (MSMEs) employ as the layoffs and job losses have become quite common.
What could this mean for MSMEs? Can they revive their business models with limited or negligible cash reserves? As per market analysts, amidst such difficult times, micro and small businesses need to not just survive the slowdown & support the workforce but also develop a slew of measures which could bear fruits in the time to come. Here are a few tips to stay connected and afloat amidst pandemic:
. Monitoring expenditures:
As the weak consumer demand takes a toll on the industrial growth, businesses need to keep their working capital steady. Entrepreneurs need to plan, in the current disconcerted market, by carefully monitoring expenses against the revenue status. This measure could help MSMEs save money & achieve their long term goal without negating its progress so-far.
. Has your business model become obsolete?
What was prominent 6 months ago may not find its audience, not until a vaccine or remedy has been developed in the market? So, businesses need to re-evaluate their existing strategies and re-assess where the business model stands concerning the revenue and cost. For instance, in the hospitality industry, small business owners can convert their hotels into makeshift hospitals. This step would not just help low-acuity COVID-19 patients but also help revive the industry which has suffered a setback due to pandemic.
. Plan policies in advance:
Entrepreneurs need to work round the clock to reduce the variable expenses and also emphasize on the crucial essentials for survival. For example, it could be a good idea to revisit sales strategy—selling online versus in-person and cutting on the market costs if the need be. Furthermore, entrepreneurs and small businessmen would have to keep the communication transparent, not just with the investors but also the employees to avert the instantaneous shock.
. Securing the right investments:
Every business needs capital to run and the question that arises in the mind of every entrepreneur in these uncertain times is from where will they get the desired capital. Since investors will be more watchful, securing the right investments could be difficult for businesses. Yet, there is a glimmer of hope that the market may bounce back after the end of an epidemic crisis and small businesses can now perhaps ask the existing investors to extend the help, given their familiarity with the business models, making them more likely to fetch desired results.
Although, this may not be the best time to be an entrepreneur as both the market and demand are showing a downward trend, however, it is known that some of the best initiatives are built when the chips are down. Like all difficult situations, this too shall pass!
With a proactive approach and a bit of readiness, India's MSME sector, which employs over 100 million people and contributes nearly 30% to the country's GDP, can spearhead economic revival. For a number of entrepreneurs and founders, this would be again a once-in-a-lifetime opportunity. Using innovative ideas, maintaining a healthy relationship with the employees and contracted parties, practicality & transparency would go a long way.