Coronavirus outbreak, a tragedy that affected thousands of lives and took the global economy to its worst position. We can’t ignore the fact that the outbreak of COVID-19 has significantly impacted the economy globally including economic slowdown of trade, supply chain disruption etc. Everyone is locked inside their houses and worried about the future impact of such lockdown on their businesses.
Different businesses have been effected differently because of Coronavirus. For Example: nationwide ban imposed on public congregations like cinema halls, food courts, restaurants and religious places. No parties or gatherings allowed. Marriages, birthdays or any kind of celebration not permitted until and unless the number of increasing cases of Coronavirus starts sinking. Schools will remain closed for quite a long time. Only shops selling essential goods will be allowed to remain open. Logistics, auto, tourism, metals, drugs and pharmaceuticals, electronic goods, MSMEs and retail among others are the worst effected sectors, the report said.
This article is intended to provide business leaders with a perspective of the evolving business related circumstances and ways to survive in the post-coronavirus economy. Now-a-days, businesses are facing lot of issues due to lockdown, therefore in this article we have highlighted the such issues and their respective solutions.
STEPS TO BE TAKEN DURING LOCKDOWN:
As everything is locked down, we cannot do much but we can plan and make use of audio-visual media during the lockdown to mitigate the hurdles that may arise when the business starts functioning. The planning and steps that can be taken during lockdown are enumerated below:
1. One should be in regular touch with his/her employees, workers, suppliers and Customers/Clients during the lockdown period.
The business runs due to employees, suppliers and customers/clients only, if you lose the contacts with any of above persons, your business might not be able to succeed during this pandemic.
The only solution is talk to your employees, suppliers and clients / customers regularly and keep in touch with them, keep your action plan ready to avoid any surprises.
Keep your employees motivated by sending messages 2-3 times in a day and keep them busy for 3-4 hours in a day for office work or for upgrading their knowledge.
2. What if any supplier or employee is not available immediately after lockdown?
The major issue a businessman may face after lockdown is unavailability of few suppliers or employees immediately after the lockdown. The reasons could be extended lockdown in their states or due to their precautionary steps to assess the situation, late joining of offices ever after opening of lockdown and what not.
Explore the alternate suppliers and service providers as backup plan and prepare a list of employees to whom you can allow work from home if they can’t join immediately after the lockdown and explore the temporary local replacement for those employees to whom you can’t allow work from home.
3. Future Cash flow Management
- Prepare a plan to manage the liquidity and cash flow immediately after the lockdown.
- Make a roadmap in advance for use of Cash Flow.
- Prepare a checklist for stock of current available inventories and its requirements after lockdown and prepare an action plan.
- Create a business plan and do detailed budgeting for next financial year. Create a plan of action to protect your business from future crisis.
- Review your current processes, templates and checklists for all functions and make necessary changes, if required.
4. Financial Issues
The most difficult task is to handle the financial issues during the lockdown, the inflow of fund is effected very much during lockdown but the fixed expenses almost remains the same.
To tackle this issue, first of all create the list of your debtors and contact them to release your payments, Renegotiate contracts with all relevant parties for mutual benefit and also make a list for your priority creditors and be ready with their payments. As you require the funds, your supplier may require the funds too. So be prepared to receive and attend their calls for the same.
Talk to your bankers and discuss on ways to ease out financial burden. May be with increased working capital limits, the liquidity crunch can become a little easy to bear with.
5. Keep your eyes on Governments moves related to your business
Keeping an eye upon the Government’s acts related to relaxations, prohibitions, opportunities and easing of some businesses etc proves to be beneficial. For Example: Ministry of Micro, Small and Medium Enterprises (MSMEs), Government of India, has issued a notification asking all business entrepreneurs and suppliers to inform the government whether they are dealing with essential items required for fighting coronavirus outbreak and Banks have allowed additional funding for the same.
The Central government has also asked automobile manufacturers to use their facilities to make ventilators to boost the country’s capacity of making such machines in view of a spike in COVID-19 cases in the country. Many automobile Companies have started producing Ventilators.
By grabbing the opportunities and relaxations offered by Government, one can help its business during lock down also.
6. Utilize the time for e-Marketing
All the businesses out there who have good business idea to promote are suggested to electronically advertise your business during the lockdown.
This include the Social Media Marketing, Email Marketing, Blog writing etc. This will help you to keep your business alive during this lock down also.
7. Shift to e-Business (If possible)
Most Big business houses have already shifted and are shifting to digital marketing services very quickly during this lockdown period.
Example: Schools, colleges and Coaching classes etc have already resorted to apps like zoom app to provide online education to children.
Just like the above, businesses like Gyms, Dance classes etc may use digital media and make a group video call and work out/dance together. The gym owners may send their daily diet charts and exercise charts to their members and keep pushing them to exercise at home so that their businesses do not come to a halt.
8. Be positive, stay healthy and spread positivity among your employees, customers etc.
Never bring any negative thought in your mind during this period, only think about positive ways to grow your business.
Read motivational books and also some valuable books to upgrade your skill levels, join some online courses to benefit your business, avoid watching News Channels during this lockdown period.
Maintain healthy relationship with all stakeholders (Employees, Suppliers & Customers) and do take care of your physical and mental health.
STEPS TO BE TAKEN AFTER LOCKDOWN
What will it take to mitigate this economic crisis, now that our traditional metrics and assumptions have been rendered irrelevant? Simply put, it’s our turn to answer a question that many of us once asked our grandparents: What did you do during the war?
Well, the answer is – during the war, we hidden ourselves in our houses and planned and thereafter we executed our plans on the battlefield.
Thus, the Companies need to think and act across the below mentioned five stages, leading from the crisis of today to the next normal that will emerge after the battle against coronavirus has been won.
COMPANIES NEED TO THINK AND ACT ACROSS FOLLOWING FIVE HORIZONS:
Address the immediate challenges to business i.e. Workforce, Customers & Suppliers
- Prioritize the activities to get the workforce back to work immediately.
- Visit your suppliers, subcontractors, customers etc to understand the ground realities.
- Contact alternate employees, suppliers etc. if required.
2. RESILIENCE (Capacity to recover)
Address near future cash management challenges and broader resiliency issues during lock down:
- Ensure that your plan for improving liquidity and cash flow are executed.
- Focus on cash flows for the short term profitability.
- Take necessary steps to shorten your cash cycle.
- Don’t withdraw money from the business, reinvest the profits for the growths.
- Execute the plan to resolve the financial crisis.
- Dispose off the uncalled for inventories as soon as possible to bring some cash flows and reduce the inventory carrying costs.
- In short, ensure that all the resources are in place to make a start afresh.
Focus business that can easily provide returns in the present circumstances and help in returning to scale quickly as COVID-19 situation evolves and knock on effect become clearer:
- Read the market and customer’s reaction after COVID-19 situation, prepare a list of demand of your products in the market.
- Calculate the short term profitability on the products after considering the demands
- Focus on the products as per the demands and profitability, ignore the product initially if it does not have any short term profitability. The Mantra of successful business is to sell what is needed i.e. diversify your business according to the demand.
Reimagine the next normal: what a discontinuous shift looks like and implications how institutions should reinvent
There may be a small or a huge difference between the normal before Covid-19 and normal after Covid-19, Business has changed forever due to the coronavirus.
A business which was normal before impact of Corona, may be impossible after Corona, therefore, one should imagine the new normal, and should act accordingly to achieve that.
For Example: Suppose normal sale of a business per day is Rs. 30 thousand before lockdown but after lockdown of 2 to 3 months this sale can’t be imagined in starting due to diversification of Customers, at that time sale of 15 to 20 thousand can be treated as normal for initial period. So finding the new Normal is equally important to reform your business
Be clear about Regulatory and Competitive environment.
The Law, regulations, economy all might change drastically after Corona, the new laws and regulations are likely be more supportive to the business, which is good for a businessman but the supportive laws may also encourage more people to start their businesses and which will raise the Competitions.
Followings may be the changes in external environment:
- Supportive Business Policies and Regulations
- Entry of new Competitors
- Exit of Existing Competitors
Therefore, the planning and actions should consider the Govt policies and regulations so that goal could be achieved and new surprises could be avoided
Please be clear and prepare yourselves to gear up your business after Lockdown.
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Note: The above is the observation of Authors as on 11th Day of April, 2020. Observations are given keeping in view the impact of Coronavirus till date, the impact can be worse than now in future, in that case some observations may be changed.
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