Covid-19 hasn’t remained just a health crisis but developed into an economic crisis globally. It has already affected more than 5 billion people around the world due to its impact on the global economy. The numbers are rising steeply on a daily basis. This situation is growing serious and adding thousands on a daily basis. Governments all over the world are trying to provide relief packages to sustain the businesses.
SMEs are the backbone of our economy. The number of SMEs are estimated to be more than 42.50 million, registered & unregistered together. It employs about 106 million, 40% of India’s workforce. Next only to the agricultural sector.
So how are we going to tackle the global recession which is almost certainly due to the Covid-19 pandemic?
The harsh truth, ‘Don’t expect your business to be normal after the end of the lockdown’. Businesses will take time to recover and come back to its original strength. Like many other companies, you hope to come out of your den and get your organization back to its full potential. Many businesses will still struggle to find to survive even after the economic restart.
So do not think that once this is over, we will meet people, exchange hugs, and party a bit. For spoilers, this is not going to happen.
Impact of COVID-19 pandemic on Every Business & How To Overcome From It
1. Take control of your accounts
Cash is king now and ever and it's essential you make sure your business has enough cash to survive through this economic crisis. When the economy is flourishing and business is coming in, we do not take a look at our cash flow. As enough money is coming in, we don’t look into our accounting books closely and ensure that we are not running out of money. However, inconsistent cash flow will make you sweat during such a crisis. You need to take a close look at your account receivables and payables on a regular basis. Also, you would need to review your books regularly.
2. Save Operational Costs
Desperate times call for desperate measures. Make sure you follow a strict budget when you review your accounts. Look into your current expenses and evaluate all the services that are not essential to run your business and eliminate them. You have to find distinctive ways to reduce your expenses which do not impact your business. Don’t be merciless while cutting, just clip the extras.
3. Contact Your Lenders
If you have already used your financing options earlier, and you know it’s difficult to make those payments, start working on it now. Get in touch with your lenders and explore how they can help you out. They would be happier to work with you than see you defaulting. Make them understand your business situation and the challenges your business is business in the crisis. Tell them how you are planning to mitigate the impact of the crisis on your business.
4.Communicate with your customers
Communication is the most important thing during a crisis. You have to make sure you keep the communication going on. In our opinion, small businesses should consider communicating early and often in the initial stages of the crisis with their loyal customers. Communicating with them at the time of crisis and sharing information relevant to them builds trust between your business and them. Inform them when you are open, closed, and what are your current offerings. Bridge the gap to let them know how you can help them and how they could help you back. Don’t play the guessing game.
Small enterprises will learn a lot from the Covid-19 crisis and get prepared for the future but it’s also true that many SMEs may not survive until the end. The only thing that matters to you the most will be your business. We are all unaware where this economic crisis will take us. The only way for us to get through this is to be stronger on the other side of this crisis.
We are reviewing our policies to help businesses in their fight with the diverse economic crisis. To help them survive all this with minimal damages and coming out strong with the support of the latest technology resources. Businesses must prepare for the future by exploring and testing their ways to access capital options when they need it.