A strong and solid business plan ensures the continuity and sustainability of any type of business. Small and medium enterprises (SMEs) represent almost 90% of the businesses around the world, according to the World Bank. This points out the significance of SMEs in the economy of the world. The COVID-19 pandemic is one of the extraordinary situations that will put the stability and resilience of SMEs to the ultimate test. Also, we will examine how different SMEs keep their businesses afloat amidst a global health issue that not only threatens the health, but also the socioeconomic stability of many countries.
Availing of Loans as a Backup
Loans are essential in ensuring the continuous operation of most SMEs around the world. They provide the necessary funds to support business expansion, stabilizing business cash flow and in managing debts and financial liabilities. Now, more than ever, many SMEs are seeing the need for loans in supplementing their businesses until the pandemic is over. Realizing the important role SMEs play in the global economy, many countries, like that of Singapore, are offering different financing programs, as exemplified by the Temporary Bridging Loan. The program offers working capital to SMEs, to help with their businesses. This is in coordination with the Government and private financial institutions. Other countries have a similar type of program or scheme for their respective SMEs, and they go by different names like SME Guarantee Scheme, Business Support Loans or simply SME loans. In consideration of the adverse situation of small and medium enterprises, these loans are offering reasonable and considerate policies such as low-interest or interest-free amortization, government support and assurance, higher loan amount and longer repayment terms.
Operating at Reduced Capacity
If your business industry is involved in producing basic goods such as foods and beverages or providing basic services like laundry or telecommunications, closing your business until the situation stabilizes may not be an option. As a business owner or manager, you are looking after the welfare of both your employees and the consumers who are in need of your products or services. To lower the likelihood of your employees being infected by COVID-19, you have the initiative to enforce measures that will keep your business operating, but at a lower capacity as of the moment. Providing protective gear and disinfecting agents such as face masks/shields, disposable latex hand gloves, hand sanitizers and rubbing alcohol and revising their schedules into skeletal capacity and at alternating days can help ensure that proper distancing and disinfecting measures are carried out. This way, you are providing your employees more time to stay at home and also allowing them to work in order to ensure steady production of goods and services and a consistent flow of income for them.
Diverting the Line of Products/Services
Being able to adapt to the situation during an economic crisis is an important aspect that SMEs must have. Today’s pandemic situation is a good example of how both your business and the general public can benefit from temporarily or permanently changing your product or service lines. For example, your textile business may have been affected by the enforced lockdowns or quarantine measures in your area. Instead of delivering garment-grade textiles and fabrics to your clients, you can either manufacture cloth face masks or supply industries who are creating cloth face masks which are in high demand in areas that are hit hard by the pandemic. Also, if your transportation service business is facing restrictions due to the lockdown, you can shift your service to goods and food delivery instead. This way, you can gain special permission to operate in this capacity while also ensuring continuous inflow of revenue through an alternative type of service. Be sure to conduct your business and its new line of products and services with due prudence and consideration of the current situation.
Work from Home Option for Employees
Offering remote or work-from-home options can be advantageous for your business and your employees. Your employees are less prone to infection if they stay in their homes instead of travelling or commuting to work. You can also get to save on utility bills and other operational expenditures if your employees are working from home. You may coordinate with your human resource and IT department on how this work scheme can be properly implemented and monitored. Although this may entail some additional costs for the employees in terms of internet and electricity bills, you can divert some of your utility allocation into additional incentives or allowances on their payrolls in order to assist them in managing their increasing internet and electricity utilization. You don’t need to have the additional allowance cover the entire projected bills, but instead ensure that it can be enough to help them handle their bills. Also, this remote work scheme can allow you to observe its feasibility and serve as reference for studying the possibility of introducing a remote workforce in your business in the future.
Being able to prepare for unexpected and adverse situations can help keep SMEs remain operational. This is why it is essential to have a business plan that covers many worst case scenarios and the action plans that can get your business out of such situations. After all, sudden situations that can affect your business are part of the dynamics of the economy, and knowing how to handle and get through such situations will make your business emerge stronger and more resilient.