5 things you need to do as a small business during lockdown

April 2, 2020

The outbreak of the coronavirus has brought economies across the world to its knees as Governments struggle to curb the pandemic. Several businesses are staring at the grim reality of the consequences as India goes into lockdown for 21 days to fight the spread of corona in the country.

A survey conducted by Statista revealed that close to 70% of small businesses anticipate reduced demand for their products or services or disruption in the supply chain due to #COVID19. While the measures to quarantine individuals are necessary, the SMEs forced to shut shop with limited cash reserves are struggling to survive in this unprecedented crisis. (Source: Statista)

If your business is incurring losses due to supply chain disruptions, lesser demand, shortage of labour and declining sales, here are 5 essential things you should focus on during this lockdown

1.    Cash flow management – Nearly 80% of Indian businesses have already witnessed a decline in cash flows with the outbreak of COVID-19. Businesses expecting a decline in revenue must first get control of their cash flows. Cash reserves are the foundation for the survival of small businesses in uncertain times.

Forecast your income in the upcoming weeks realistically and map out outflows that are unavoidable to predict your cash flow requirements. Prioritize expenses to what is critical and avoid discretionary costs in the time-being. Accommodate your outflows by prioritizing within the available resources. If there is still a deficit, create a contingency pool by availing funding against future receivables.

2.    Product & Process Development – As a growing business, there is often little time available for strategic thinking amidst the hustle and bustle of scaling up daily operations. Utilize the opportune idle to time to get cracking on your wish list projects and revisit product innovations or process improvements.

Brainstorm with your team members on how you can make your product or offering more robust to meet changing customer expectations. Reimagine internal workflows and processes to be more efficient and customer-friendly. Make the most of this situation by utilizing your time and re-invent your business.

3.    Social Media Marketing – Social distancing has led to a significant increase in the number of social media users. A lot more people are spending their time online upskilling themselves and engaging with brands they connect with. 66% of social media users are convinced that their social media usage will keep on increasing even in the future if the lockdown further continues due to the pandemic. Avoid exploiting but do capitalize on this trend to reach out to your target audience by building a strong social media presence.

Given the current lockdown scenario, building an online presence through social media is the most effective way to gain attention from potential customers and keep existing customers. Social media platforms, if used responsibly in testing times, can help build a strong brand reputation that resonates with audiences across geographies.

4.    Business Continuity Plan (BCP) & Disaster Recovery (DR) plan – Occurrence of adverse events often bring to light the preparedness of business to survive uncertain times. Use the learnings from the impact faced with the outbreak of the coronavirus to put in place a robust business continuity plan and disaster recovery plan to ensure better management of such situations in the future.

There might have been unpreparedness this time to transition into remote working on short notice. Simple measures like providing laptops to critical employees, using cloud servers on-premise could mitigate these circumstances for the future.

5.    Plan ahead for the future – As the pandemic unfolds in India, the impact is sure to seep into the next financial year as well. Re-look at your business metrics and evaluate critical measures that need to be undertaken to remain profitable.

You could also take advantage of the financial assistance and ease in regulatory compliances offered by the Indian Government to prevent insolvency and sustain your business operations smoothly.

Unprecedented times test the real strength of businesses. Focus on the fundamentals of your business and utilize the time proactively to fortify them as you ride out this storm.