For businesses across the globe, the last twelve months have been nothing short of a nightmare – one which still isn’t showing much signs of ending. Many startups and mid-level companies have been forced to shut up shop altogether, while nearly 72% businesses have reported significant reductions in their cash flows. The manufacturing industry has been the worst hit, while software and tech companies are facing huge problems too. In what follows, we will highlight a few strategies to deal with the COVID-19 challenge, till everything turns normal again:
If you – the owner of an organisation – is struggling in the face of the pandemic, think about the position of your customers, who are probably under even greater stress. Talk with your clients, try to understand how they are planning to cope with the crisis, and, if required, deliver certain basic services at discounted rates (or free). Do not sever ties with anyone just because he/she fails to meet a couple of payment deadlines. Once the virus threat is neutralised and things are back to normal, people will remember your good gesture – and your business reputation will go up.
Use a contingency fund
Think about it – what’s causing the biggest problem for businesses in these trying times? That’s right, the paucity of cash. To tackle this, set up an emergency/contingency fund – one that would be enough to tide over the next 3-4 quarters. If you do not have such a fund already, set it up as soon as possible. Use the money from that fund prudently – to maintain your resources (instead of, say, starting a new ambitious project). Your business should never run out of a ‘sufficient’ cash availability.
Be transparent and communicate with everyone
You are worried about sustainability of your company. Your employees are worried about their job security. Potential clients are worried about exorbitant expenses. As an entrepreneur, the onus is on you to communicate regularly with everyone – and let them know what the situation is, and what direction your company is heading to. Everyone has been emotionally impacted by the Covid crisis, everyone is anxious – and good, honest communication is the only thing that can tackle such unnecessary anxiety.
Frame a careful policy for downsizing
This should be an absolute last resort – but when the time comes, it’s always important to curtail expenses by downsizing. Talk with the employees and help them understand why the management is planning to put them on unplanned leaves. Make sure that, once the pandemic is over, you still have the chance to call back these resources. As an alternative, have discussions on whether it will be practical to implement a company-wide salary reduction. Many employees across the globe have agreed to upto 50% salary cuts – in exchange for job security. Downsizing should always be done in a single round. Repeated announcements regarding staff reduction will only create more unrest and uncertainty among the remaining workers.
Take short-term views and shift priorities
The raging coronavirus has played havoc with all the long-term estimates of revenues, cash flows, profits and expenses. The key here is to abandon such long-term planning (because there’s no certainty on what the situation might be in a couple of months time), and go for short-term strategies. Create a revised product/service line, cut costs as much as possible, and revisit your business strategies on a weekly/bi-weekly basis. You need to exist and survive till the Covid-19 crisis gets over. The new and costly expansion plans and new product launches can wait.
Look out for new opportunities
Sure enough, the months of the pandemic are not rewarding from a financial perspective. That does not, however, mean that your company has to stall during this period. Keep an eye out for new opportunities to forge partnerships with clients, businesses and others – partnerships that will be mutually beneficial when the global economy swings upwards. Enroll your team for online classes to enhance productivity levels and professional skills. A couple of NLP coaching sessions would also be a great option – to keep people engaged and motivated. Research for new products/services that you might be interested to develop, once the crisis is over.
Invest in services and tools that are in demand
Social distancing is the ‘new normal, and the world has gone ‘virtual’. In such a scenario, it would make a lot of sense if you manage to invest and launch tools/services that people are actually looking for right now. For example, if you have a conference management platform, start supporting virtual events (through live video integrations) on it. In the world of software, most people are working from home – so you can also consider coming up with any solution that makes the “WFH experience” for people simpler. Always remember, in a Covid-ravaged world, opportunities do not vanish – they just become a lot more tricky to find.
Look for new financing channels
Once the world moves out of the current “survival mode”, there will be a mad rush among businesses for fresh financing. A smart option for you would be to look for such financing right now. Sure, new investors might not be prepared to spend big money, but if you have them onboard right away, you’ll at least be assured of a steady financial support – both now, as well as when things improve.
Make use of the available time
The scale of operations is lower, the number of clients you service is (unfortunately) smaller, and you have more time on your hands. Use this time to manage those long-pending tasks, to work on your non-priority projects, and to resolve the niggling issues that your business has been facing for long. Post-corona, the rush of projects and clients will be back – and you will not get the time to address these things. Revise your terms of services if required, conduct internal training sessions, and get your financial reports in order.
Be flexible. Be positive.
The global pandemic has posed significant challenges for every business owner out there. If you are one of those “glass-half-empty’ persons, the situation will be even bleaker for you. Keep in mind that you have already survived for close to a year, and it shouldn’t be long before things start looking up again. Keep an eye out for positive trends in the market, and be prepared to update your operational policies as the situation demands. There is light at the end of the tunnel – BELIEVE that you are within striking distance of it.
Covid-19 has placed unprecedented pressures on business owners across the world. Right now, nothing is more important than staying together, being honest with partners, employees and stakeholders, and following smart survival strategies to tide over these tough times. The world will soon be back to normal (hopefully) – stay optimistic, do not despair, and your business will once again become successful.