I have been spending my time working obsessively with entrepreneurs who build small and medium scale business especially from a couple of weeks, what we figured out is that the next couple of months is going to be very tough for business in India, only the smart and fittest can survive this battle. If you are also a small business owner you are up for an uphill battle, so I gave some thought to what you can do in next couple of months to get back businesses on track and I am going to do this as well with a couple of startups which I run on my own. I suggest, go ahead and promptly follow these steps in order to control the damage.
1. Keep Cash
Gone days, there were many factors that could trigger a cash crunch but entrepreneurs mastered the art of dealing it, but COVID is a new problem and none has clue on how bad this blow goanna be. This period is going to be very cash strapped, especially if you are a small/medium business owner you have to worry about conserving cash, you should worry about the contracts that you’ve got signed and collecting on those contracts, you should be worried about the invoices you issued and collect on those invoices, we generally don’t have good acts of enforcement built into our contracts and a lot of you’re going to find yourself tested to pay off including your contracts, the first thing you have to do is to relook at your contracts and collect all of them with no further delay ’cause the next 90 days are going to be Cash, Cash and Cash.
2. Get in touch with your Customers
Focus on getting really close to your customers over the next two days, write down your top contributing customers list, go see them, talk to them. They’ve got stuff going on and obviously they may not spare time for you, but it’s important for you to go knock their door and find out if any of their purchasing patterns, capacities or behaviour has changed post-COVID, see if they are in need of anything new, try to bridge the gap by building on it and promise them on the new offerings. More importantly, buying their time and enquiring into their lives will further strengthen your bonding.
3. Look for Credit Options
Yes, look for a short-term lending facility, make sure you get an adequate line of credit, go talk to your bank and enquire if you can get short-term loan facility/OD or any kind of financial assistance for next 90 days, this is most critical unless you’re sitting on a 90 day cover of cash flow to current liabilities you’re going to find yourself in a difficult place. It’s a challenging time ahead, governments are going to stimulate a response, it was a steady and clear response by our prime minister Modi and a statement from him spoke about a physical program but you know in India everything is gonna take time, on the monetary side the Reserve banks will also come up with some kind of relief for small businesses and even that’s gonna take time. Banks, of course, are going to come up with very stringent credit criteria, reaching them early could help, if your bank is helpless, try talking to private lenders or negotiate with the investors. Basically the next 90 days you’re on your own, so explore all available short-term credit options.
4. Talk to your team, set a clear route map
Talk to your team and support staff, discuss with them first about the implications of the virus, talk to them about the right habits like washing hands, sanitizing workstations, and educate them on self-care and office hygiene to curve it in the workplace, give them flexible work hours where they can come a bit later and leave a bit later in order to avoid busy public transports in the peak hours. Have a clear and detailed conversation with your colleagues to manage expectations and fears, put in front of them your clear financial picture, address the team as a whole to build confidence. Have a one to one talk with your key team members and take their inputs, discuss your plans and a set a clear route map and ensure everyone is aligned.
On a positive note, COVID19 could be one of the biggest inspirations for innovations. Sanitizers in the supermarkets are already out of stock, Vegetable carts are driving into the apartment premises like never before, Video calling apps are flooding into the market, ‘No Hand Contact’ dispensers are in high demand, Refined oil sales skyrocketed as people opted cooking at home( so now you know the real oil you have been eating all these days in your dine outs), the market is open for new innovations, the faster you innovate now the bigger you grow.
6. Communicate with the external stakeholders
Get ahead of the communication; I would strongly suggest you get ahead of the curve. Your external stakeholder would-be customers, social media followers, vendors, dealers/franchisees and suppliers who are here and in other parts of the world get ahead of the curve and talk to those external stakeholders, I would advise you to have a press release or some sort of press statement issued on your website about how you are responding to the Virus and mitigating the risk, give a mission and vision statement if required. Difficult times ahead, we don’t know how long the virus is going to be here with us, we have no clue how deep this impact is going to be on business as well, all we have to do is to act fast and take wise decisions till this virus vanishes.