The Pandemic Covid-19 has adversely affected the economic scenario of countries all across the globe. India is no exception. Though the importance of social distancing and lockdown in curbing the spread of the virus cannot be stressed enough, yet these measures have caused huge repercussions on the economic growth of our country. This is because, the lockdown of the nation is causing significant disruption across multiple sectors, including Manufacturing, Tourism, Hospitality, Oil and Financial among others. The ripple effect of this shut down is having a key impact on India’s economy, as well as business sectors are getting affected, resulting in low revenue generation due to an eventual halt/ slump on the sale of products and/or services. Businesses are experiencing major impacts, no matter how established they are and are having to re-look at how they manage and operate their activiti including re-visitation of their business plans. Startups or relatively small businesses are finding it more difficult as they have smaller margin for managing sudden slumps. So during this testing time, entrepreneurs will have to adapt to a new set of rules and be mindful of certain aspects to alleviate risks and to survive the slowdown caused by Covd-19. Moreover, it is also very important to stay connected during this phase.
FOLLOWING A FEW RULES CAN HELP YOU :
• Check the feasibility of the business’ model – In current situation the market is changing every week and mostly for the worse. So it is imperative to reconsider the business model and reassess where your business stands as per your assumptions regarding the revenue and cost.
• Plan policies for next 3months/ 9months/18months – Since it is difficult to predict the time till when the epidemic would last, it is important for businesses to be prepared for all scenarios. If the problem lasts for three months, an instant halt on variable expenditures ( like hiring, marketing, etc) can help. Howeve, if the crisis persists for a longer span, entrepreneurs need to reconfigure their business strategy to reduce the variable expenses, renegotiate fixed expenses ( rent, salaries, equipment lease payments, etc) and focus only on the crucial essentials for survival.
• Communicate transparently with your customers – We are all in the same boat. So the ideal way is to stay transparent with your consumers about what your business is going through. If you need some extra time for delivery of your good or services owing to delays caused by the lockdown, be open about it. Customers can always empathise with companies facing a crisis, as long as the communication is transparent.
• Handle sensitive employee-related situations with empathy – For larger companies considering lay offs, the primary option should be to cut down the salaries of the higher paid employees so as retain the people who can least afford to lose their jobs. However, when the time comes to make the tough call, do it with compassion and carry out the implementation at one go so that it does not affect the employee morale.
• Secure liquidity – One of the key challenges for businesses is access to cash. Running any business is a risky endeavour and small businesses are particularly vulnerable. Overhead costs like rent, payroll and utilities leave very little liquid cash to owners. On top of that there is lack of revenue from slowing services owing to the Pandemic. There are proposals like ” small business workplace stabilisation fund”, enhancement of loan limits, etc which can ensure cash flow and stabilise the market.
• Communicate to stake holders – Consult frequently with your investor economic scenario or external experts to plan the right form of communication with stakeholders, most importantly customers and employees. Always have an honest conservation with your entire leadership team.
This is the time when economic scenario we need to understand the gravity of the situation and turn it favourable by being optimistic, realistic and a little tactful.