Humanity is passing through a unique phenomenon since 1920, when the Spanish Flu outbreak hit the planet. Its a test of time for everyone, especially entrepreneurs and small businesses. The impact of coronavirus is vast across all sectors and scales. However, the focus of discussion in this article will be towards small & medium size business.
The Global gross domestic product is expected to shrink to 0% from 2.5% forecasted in January 2020. Global stock markets lost trillions of dollars, whereas investors and the confidence of businesspeople is shaken.
Why do we call it a test of times? It is very easy to get detracted and frustrated in growing uncertainties. This can lead to wrong decision making harming the business in the long term. Usually, such moves fetch or seem to fetch short term benefits; however, it may damage the business interests in the long run.
Most of the companies, especially Small and Medium size enterprises (SMEs), are facing added challenges that were never seen before. Among many other things, we would like to highlight a few critical factors to be vigilant of:
The pressure of new business
As the world affairs are almost at a standstill, it is very infrequent to sign the new business except for a few business categories. In this situation, BensCA would advise you to focus more on existing clients.
The best way is to support them with extra time. You can offer them a mutual arrangement in terms of payment despite your business may be in the same boat. It will help you win more trust and mutuality. The key takeaway here is to retain Existing Clients, don’t lose what you have.
Pressure of collections
The biggest challenge every other business is facing during COVID-19 is the cash crunch.; Most of the businesses are either not operating and, if operating, are slow in cash flows. We being an Accounting and Bookkeeping firm in Dubai, are working very closely with impacted businesses to suggest making a mutual arrangement with their clients on payments. Presently, survival is the main objective in this situation! So, small and medium business companies in UAE should help each other to survive and come out of this situation.,
There is a lot of business to do mutually going forward versus pushing behind a few months overdue amount. What makes you run long term, is your relationship and mutual arrangements, not the immediate receipt of the outstanding amount. The key takeaway is to support each other and work towards mutual survival.
Social distancing
It has remained an easy task for businesses to indulge in social networking, meetings, and gatherings. It usually results in mutual business and growth. On the contrary, the push of the time is to create social distance. There is an idiom Blessing in Disguise, take the threat as an opportunity, utilize your free time to redefine your business priorities, revise internal processes and offer free advisory sessions to your clients.
Use this time as a cleanup for your business fats, which are holding you from running fast. The Auditing firms in Dubai can help you identify areas where the fats are to make your organization slim and smart. Today you have more time to focus on underlined business issues, which you always kept in shelf to tackle later.
Hasty decision
Decision making is a big part of the senior leadership in the normal course of business. A full set of facts gives enough evidence to the leaders for taking an appropriate decision. However, in situations like the one created by COVID-19, business leaders can’t wait for the full information, they have to keep making business decisions with developing state of affairs. The right and timely maneuvering make the situation in your favor.
Here, this is very important to understand what decisions you are taking, their immediate impact, and effect in the future. You may feel that certain decisions have created a favorable situation in the short term; however, they may be drastically unfavorable in the long term. Don’t be a victim of your own decision amid COVID-19.
1) Key Talent of the company- assess retention vs. sourcing again the similar and capable talent.
2) No compromise on business Accounting & Bookkeeping & Tax Reporting for taxation compliance
3) Today versus tomorrow- Unfavorable situation is temporary while the ongoing operations are permanent.
4) Damage to core structure and operations- your business core structure should stay intact.
Visionary businessmen look beyond the ordinary and think out of the box. The current situation may temp to make certain decisions. However, there is no way back once a decision is taken and deployed. It may make your business or break it. Therefore, small and medium-sized enterprises should consider the particular scenario closely to avoid becoming prey to poor decision making during COVID-19.
Tips and Advice
As crisis recedes, it reveals opportunities for remedial action. Fresh experiences produce a rare degree of political will to prevent future disasters. Good crisis managers will capitalize on the moment rather than drift towards complacency.
1) If you were not before, become Tech-Enabled business operations, use available online tools to stay in operation remotely.
2) Keep engaging your team via social and entertaining virtual gathering; there is a lot that can be done, the only difference is in-person presence. However, it keeps your team up and engaged.
3) Show your human side, the human element, and human resources is key to success and this is the biggest asset you have.
Key Aspect to keep an eye
1) Cash management- Mutual plan with customers and suppliers.
2) Key Team & Talent the crisis will pass, but if the talent is lost, it can create significant damage.
3) Reach out to your lenders to negotiate short-term relief.
4) Reach out to your vendors to confirm supply continuity.
5) Empathetic in reducing employee hours.
In summary, this is a test of your visionary leadership and skills to deal with ambiguity and uncertainty -. While making business decisions during COVID-19 uncertain time, the key is to make prudent decisions, be patient and empathic, support each other-your customers or suppliers and protect your company’s valuable asset, which is human capital.
To support you, we offer a free one-hour counseling session to assess your business health and advise you in making major business decisions by providing you insights and related advice. Contact us today to schedule a video meeting.
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