World is approaching a standstill owing to the COVID-19 pandemic. This viral contagion is mercilessly tearing down people, livelihoods and economies. Like all, businesses are also coming to a halt. This novel coronavirus, or SARS-CoV-2, has led to a near-shutdown of much of the global economy. Governments are formulating coping strategies and businesses are broadening their circle of stakeholders to look beyond their bottom lines.
In this difficult time, we must look beyond the envelop for better planning and budgeting. In a bid to unlock each other’s greatest potential we must push the cocoon and come forward and together as one to achieve our larger objectives.
Due to lockdowns, the supply chains have broken, and accounting and bookkeeping has taken a back seat. Businesses need to be up to date with their finances, with deep insights into cash flow to plan ahead in these uncertain times. We need to plan for the future, to stay focused and on target. We should build Low Spend or Focused Budgets to plan for contingencies arising from this pandemic.
Governments of major economies are trying their best to overcome the immediate challenges and pursuing big corporate houses to cope with them in this difficult time. Singaporean, US and Canadian government are coming forward with resilient budget to bailout their struggling economies by COVID-19.
European Commission also came out with its own response laying out a $37 bn package of measures intended to mitigate the socio-economic impact of Covid-19, including bringing forward €1 bn out of the EU budget to act as a guarantee to the European Investment Fund to encourage banks to lend to SMEs in affected sectors. Indian Prime Minister urges to all private companies to honor payment commitment to employees.
This emerging scenario has changed the dynamics of business and created the cripple in organizations irrespective of size, however startups and SME’s are at the receiving end.
The primary focus of start-ups is to survive the year. Some businesses need to completely re-strategize and have revamped business plans and take crucial actions suitable for their industry. SMEs are more concerned about cash, cost and credit, and more prone to drying up cashflow. Startups have already started seeing the anarchy and uncertainty unleashed by the Virus.
In a recent Wall Street Journal report, HR consulting firm leader Arthur J. Gallagher said he anticipates companies will be willing to adjust their PTO policies due to the talent shortage many are experiencing. “With the tight labor market, most employers do not want to have to replace existing employees,” he said. “I do suspect we will see an increase in flexibility,”
This pandemic might take more than one quarter to be contained and global economy will take time to recover from it. Some experts feel that there is a need of explicit communication with all stakeholders- employees, vendors, investors, etc. Before resorting to layoffs, we need to be more compassionate & accommodating and employ measures like salary cuts, unpaid leave etc.
In this gloomy environs, we need to have optimism. Start-ups should focus on positive outcomes and use this time to scrutinize the quality of revenue and quality of growth in their company. They need to make use of this time and speculate quality improvement. They should broaden their horizon of intellectual property.
The startups and small firms which were midway in the process of fund-raising when the virus disrupted the regular operations, they should try their best to close that round, even if it may be at a lower valuation or have different terms than earlier proposed, for the sake of having cash and surviving.
Entrepreneurs say this is certainly the worst crisis for startups and SMEs and should lead to contingency plans that include job cuts and the suspension of operations in several cities.
Food, grocery and medicine demands in big cities is getting a spike as increasing number of people are staying at home during the crisis.
Online/e-leaning programs are in demand as people are staying home and have more time to invest on learning. So, companies operating in this industry should put forth foundation courses, short courses and advance courses separately to cater to the needs of the people.
In the meantime, insurance startups are seeing a sudden surge in demand, and it is transforming into actual business as some startups have begun offering products to cover the Covid-19 treatment cost.
We have learnt that we can work leaner and be more cost-effective. Potential points of waste are highlighted in these crisis times and now we know fixed cost can be reduced. New revenue avenues have come up which are required for business continuity. We must have contingency approach ready and have alternate business continuity plan in place for such times.
We need to be flexible, make informed decisions, have bounded optimism and be compassionate. Most important is communication with our stakeholders to keep the faith.
This pandemic has taught us that false borders like religion, culture, occupation or financial status provide us no protection. Job is just what we do, it’s not ‘the life.’