By Vaibhav Vasa, Director, Biz Analyst
Across the country, small businesses are slowly, cautiously reopening, even as the COVID-19 pandemic continues unabated. For better or for worse, the wheels of the economy are turning again, though in radically different circumstances than at the beginning of the year. There are going to be winners and losers here. Those SMEs that are best able to adapt to the post-COVID environment will stand to gain from immense opportunities as the country gets back on its feet.
It makes sense, then, for SMEs to stop and do some serious introspection about their processes and systems before reopening. What should SMEs consider before they go back into business? Let’s take a look.
Effective cash flow management is a must
The post-COVID business environment is cash-starved. Everyone, on every link of the chain, from suppliers to customers to SMEs themselves, is likely facing a cash flow shortage. In this situation, SMEs need to keep a careful eye on cash flow, in terms of both inflows and outflows. Customers might demand favourable credit terms in exchange for business. SMEs will need to balance this with their payment obligations to suppliers. Because they are unlikely to have significant cash reserves, it’s critical to rationalise expenses – to scale down or postpone non-core expenses. Until the situation normalises, SMEs will need to manage cash flow effectively and frugally to ensure that they have enough operational capital to stay open.
One way SMEs can do this is by leveraging mobile and cloud-based ERP solutions that pair a low buy-in cost with phone-friendly resource planning tools.
Products and services need to be re-engineered for the new environment
While businesses might be gradually opening, mandatory lockdowns are still in place across much of the country. Even in other areas, foot traffic at physical service and retail outlets is a fraction of what it was before the pandemic. This doesn’t mean that the customer base has disappeared: they’re just staying at home. SMEs need to adapt to this paradigm shift by changing the mode of delivery for their products and services.
Small retailers can collaborate with hyper-local delivery players to ensure that their customers get everyday essentials delivered to their doorsteps. Service providers can leverage voice and video-conferencing to offer a wide range of services virtually. SMEs will need to identify areas of opportunity quickly and reposition their product and service lineups as “remote friendly” with minimal disruption.
SMEs need to plan for the future
The longer the pandemic goes on, the more likely it is that it will have large-scale, systematic effects on the economy and on various industries. SMEs will need to plan for the future within the bounds of their industry. This means introspection and asking some of the following questions:
Is this industry permanently shifting towards remote delivery? Where are we at with digital transformation? What will the regulatory environment look like in six months or a year and are we ready for that? SMEs will need to balance limited resources to ensure their survival in the here and now and plan for long-term viability.
Planning, preparation, and realignment: building SME resiliency
In a dynamic business environment, SMEs need to prioritize their change strategies. The overall goal here needs to be building resiliency, to be able to weather uncertainty. This means further integrating digital into their processes – from something as significant as opening an e-retail outlet to as simple a step as enabling live chat support. It means keeping abreast of central and state government decision making to ensure readiness if the law or the terms of doing business change. It also means making remote functionality a core pillar. For the foreseeable future, remote product and service delivery is going to be vital to business survival. And even after the pandemic is dealt with, systematic changes in consumer behaviour mean that remote offerings will remain critical.
SMEs have limited time. They need to adapt. They need to look towards digital. And they need to plan for a world where today’s externalities don’t suddenly disappear. This is the world we live in now and SMEs need to be resilient.
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