4 Ways Your Small Business Can Survive The Covid-19 Pandemic
By Nurul Khairiah Mohamed Yusof
Being a small business owner in these difficult times can lead to several setbacks. But, there are ways to overcome this.
There’s no doubt that small- and medium-sized enterprises (SMEs) will be the hardest hit from the current Covid-19 pandemic. The bigger businesses have a better chance of surviving; however, small businesses tend to live only with a few months of cash flow (at most), so when something as this pandemic hits, the consequences can be devastating not only for the business owners involved but also for the employees they support.
“Small-business owners trying to weather the coronavirus pandemic will face a financial blow that’s likely to be worse than what they experienced during the Great Recession more than a decade ago,” says Karen G. Mills, a senior fellow at Harvard Business School.
She added that this is going to be orders of magnitude worse than the financial crisis. The 2007 and 2008 global financial crisis was a severe worldwide economic crisis. It is considered by many economists to have been the most serious financial crisis since the Great Depression of the 1930s.
Some of the problems these businesses are facing with are:
Drastic changes in working environments- remote working might not work for everyone (unstable internet connection, lack of working space at home, manual documents submission, etc.)
Unclear flow of communication and data among the team
Disruption to company’s cash flow and unable to pay employee’s salary
Not ready for a long-term recession period
So, how can small businesses survive the turbulent times coming ahead in 2020? While there are no easy answers, here are 4 tips to start implementing and planning at least for the next three months to help you navigate the situation.
#1. Keep your order of communication clear
Although we’ve seen employers work hard to keep their workforce informed, yet disinformation and confusion have spread along with the virus. Your employees (and stakeholders) will be looking for reassurance from you that they are being protected.
To enable timely two-way communication and employee tracking and to disseminate critical information, companies must validate that emergency notification systems are in place and tested on a routine basis.
Alternative communication channels such as social media e.g WhatsApp (Google Play, App Store), Telegram (Google Play, App Store) may be used, especially if the telecommunication network capacity is strained. In addition, companies should deliver pandemic-related training to enhance employee preparedness and alleviate any concerns.
Keep your employees informed with daily newsletter or announcement on the changing policies and type type of support they can get from the employer. Usually, this can be done by emails, video teleconference, or texting applications to get the message running.
#2. Support and protect employees with clear working policies
If your company opting for remote working, make sure to have a clear policy about it. For example, the method of communication will be slightly different from before. You will need to rely heavily on technologies to stay connected with each other. Make sure employees have a basic understanding of using teleconferencing applications like Zoom, Google Hangouts, and Skype before proceeding to use them.
For employees, it might be tough to make a mental separation from sometimes-chaotic home life and they are finding that they don’t have the skills to be successful in an extended remote environment. To assess this problem, the employer should provide enough support and addressing issues their employees faced while working remotely.
This can be done by conducting training for the online process during working, a step by step guide and emotional support (because we are human) and let’s face it, it is not easy to get used to working in a new environment.
If your company is part of the essential services as mandated by our government, the employer must address the safety of employees followed by whether they are available to perform critical functions. Companies need to be able to monitor the situation, provide a safe work environment, and offer their employees the support they need.
Many companies have now activated no-travel and physical-distancing-at-work measures to help their employees practice a safe working environment.
#3. Tap into resources and financial initiatives provided by the government
Companies should utilize resources and financial initiative by the government to keep operations running as well as paying workforce salaries.
The Malaysian government is already putting together some initiatives to support small business owners. On Monday (Apr 6), Prime Minister, Tan Sri Muhyiddin Yassin announced an additional stimulus package worth RM10 billion to help struggling SMEs affected by the Covid-19 outbreak.
One of the great initiatives is the wage subsidy programme that worth RM13.8 billion that will be given for 3 months for all companies registered with the Companies Commission of Malaysia before Jan 1, 2020. The allocation is as follows:
RM600 per head for companies with 200 workers or more
RM800 per head for companies with 76 to 200 workers
RM1,200 per head for companies with less than 75 workers.
Banking institutions also provide six months of deferral or loan repayment moratorium, conversion of credit card balance to long-term loans, and the restructuring of corporate loans.
All of this support from the government is a big opportunity for a business owner to maintain their cash flow and allow for some breathing space before making any further planning.
#4. Make a three-month financial plan for your business
Every small business usually has the same key expenses, which include employee salaries, office rent, and utility bills. Further expenses range from industry to industry.
Speak to those you need to pay in the next three months (landlord and suppliers) and find out what options they are willing to negotiate to spread out the costs.
The government has also announced that they will give an additional tax exemption for private premise owners who will give rental discounts exceeding 30%.
Also, look at ways you can cut costs. But, use this as a last measure after we have seen at least two months of damage from the Covid-19 pandemic. Your biggest costs would usually be your staff and your office rent. You could perhaps freeze hiring on adding any more full-time employees and instead work on a project basis with freelancers.
This is a tough time for everyone whether you are an individual or a business owner. But, with good planning and preparation, these turbulent times can turn into an opportunity to reassess our goals and making the best from every obstacle coming. Malaysia Boleh!
What other tips you think can SMEs owners implement in their businesses? Share with us in the comments section below.