The impact of the COVID-19 pandemic has transformed the way businesses operate around the world. The current pandemic is no different from the past; resembling the historical uncertainty index and its economic impact. While few small businesses are striving hard, many are creatively rediscovering themselves as explained in this COVID-19 small business guide. Although switching to an online mode is not feasible for everyone, most businesses find innovative ways to advance their operations to fight the pandemic technically.
On the contrary, several businesses failed during the tough times of coronavirus lockdown. They were unable to replicate their previous working models or move in a new direction, despite the availability of remote working mediums, they shutdown. Small and medium businesses in India must align their operations with the primary mission. What works best for an organization can be drawn depending on its value, customer demand, and work culture.
The Indian government implemented social distancing, regular usage of masks in public places, limited storage capacity, and several other changes to ensure people’s safety across the nation. These changes are daunting and confusing, especially for struggling businesses. Since the government has lifted the lockdown, companies need to ensure their employees’ and customers’ safety and protection from the virus.
Sustaining an existing business or starting a business can seem a bit overwhelming during the COVID-19 global pandemic outbreak. Goods news? Imprezz GST billing software is here to help. Here’s the “Business Survival Guide for the COVID-19″ to help you learn everything you ought to know to successfully navigate your business while facing the complexities and impacts of coronavirus COVID-19.
Impact of Lockdown on SME’s in India – Small Business Problems and Solutions
Small businesses in India employ about 110 million people across the nation. According to McKinsey’s report, 25% of the 63million SME’s are likely to fall behind due to the prolonged lockdown. The consumer and retail industry experienced about a 25-30% decrease in production during the second half of 2020. It was mainly caused due to the disruption in China’s supplies, production shutdowns in affected countries, cash flow restrictions, and decreased economic activities.
Likewise, the manufacturing sector’s production rate, including electronics, textiles, pharmaceuticals, and automobiles reduced by up to 50%. The higher number is mainly due to extreme reliance on raw materials, production, and auto industry demand from china. It has placed several lives at stake. If SME’s in India fail to build resilience or adapt, it might result in millions of people losing their livelihoods.
Challenges for Small Businesses
SME’s are facing a various host of threats for survival. Some sectors like travel, accommodation, food have suffered more than others. The wise strategy would be to go through the four-stage process: shut down, supply chain disruption, declining demand, and recovery. Although businesses have been witnessing the severe effects, none know how long the crisis is going to last.
Below mentioned are some of the crucial business challenges small business owners face while transiting from closure to recovery.
1. The decrease in Demand & Liquidity
Demand has collapsed for SME’s and Entrepreneurs regardless of the industry type. Moreover, payments from customers have slowed down on orders already received. It is important to note that SME’s have small cash reserves. In this case, they shut down first in the vent of liquidating stocks. Businesses involved in international trade, relying on US dollars are more vulnerable than others.
2. Input Access & Inventory Management
SME’s import most of their inputs from abroad. It is why the supply chain is long and complicated. The collapse in orders, inputs, and raw materials in other affected countries can complicate the supply chain for SME’s India.
3. Work Environment
SME’s in the manufacturing industry can’t remain open while operating in a confinement situation. Factory floors are not designed for social distancing. Factories shut down led to a mass migration of workers. Many factories lost their employees, and it can be challenging to re-group them all.
4. Political Uncertainties
The pandemic crisis has led to rapid changes in government policies. It is not a feasible option for SME owners to create a crisis team that can track each policy change; they usually work alone. Frequently changing, uncertain policies have resulted in supply chain disruption that leads to enormous responsibilities.
5. Emergency Support System
Most SMEs operate either informally or on the edge of the formal economy. They barely seek government support or participate in supportive government networking. However, during any crisis, it is the government that renders support. In such a scenario, it is difficult for the government to reach out to these businesses and find ways to help.
Survival Strategies for Businesses – COVID-19 Small Business Guide
India lifted the lockdown quite early to cope with the economic crisis caused due to COVID-19. Although everything is now back to normal with states re-opening completely, there are various precautions to consider. Businesses must adhere to guidelines and steps to protect their enterprises. One way to successfully secure businesses amid the pandemic is to plan essentially for survival.
Here are some of the significant steps small businesses must follow to navigate their ways towards success and survival.
1. Focus on Finance
Business owners can make financial decisions only when they have an accurate picture of the cash flow. The decisions must be primarily driven by customer and small business accounting data. While taking any decisions to fight against COVID-19, it is recommended that business owners take financial assistance from an expert to secure the enterprise financially. Businesses facing financial problems must lookout for online resources that can assist with their cash flow.
2. Real-Time Custom Reporting
Although it may seem complicated, it’s worth it! Generating financial reports and having all-time access to data unique to your business requirements is vital while fighting crisis like the pandemic. Rid from accessing data through multiple excel sheets, manual data review, and a bunch of manual reports. Spend time effectively by making data-driven decisions. Install Imprezz online accounting software that enables you to generate reports directly within the system.
3. Leverage the Free Marketing Opportunities
Most small businesses are drastically trimming their budget on marketing. Instead, the best economical option is to explore free online marketing resources. In today’s digital world, spreading brand awareness and value-added messages establishes stable sales. There are various marketing mediums such as social media platforms, lead generation platforms, blogs, content marketing tools, email marketing tools, and more that helps build ideal customer relationship.
4. Build/Re-Build the Eco-System
COVID-19 pandemic has increased the need of guidance for business organizations more than ever. SME’s including government enterprises require assistance. ITC’s institutional strengthening teams usually connect trade promotion organizations worldwide to share their best techniques in practice, along with emerging resources for small businesses. Businesses can learn from each other and grow stronger together in these challenging times.
5. Alliances and Value Chains
Businesses involved in the entire value chains are supposed to work together to restore global trade. Have more significant alliances among each other and consumers.
How Can Financial Service Providers Help SME’s Re-Discover Themselves?
Financial Service Providers (FSPs) offer financial services; it encompasses a broad range of businesses that include credit unions, money management, accountancy companies, investment funds, and more! They play an integral role in the financial life-cycle of the enterprises they serve. FSPs have a relatively closer relationship with SME’s in India. They are positioned to help small businesses adapt to the new reality, implement changes, and restart with new business strategies.
Financial institutions like Imprezz accounting software company enables small businesses to grow successfully. It provides mediums for digital payment, business education through blogs, and mentors business owners through 24*7 customer support. Since its inception, Imprezz has helped several small businesses in India expand their reach and adapt the best strategies and practices. Implement Imprezz accounting tool to build financial health and resilience.
Sustaining a small business amid the global pandemic is tough. Small business owners will have to be flexible, focused, and disciplined. It is vital to ensure safety measures among both employees and customers. It is going to get more complicated in the days to come. With the drastic decrease in business profits, it will get more challenging for businesses to cope with economic uncertainties. Business owners must instead focus on the things they can control and ignore the rest. With the right systems and resources in place, businesses will all be able to successfully meet the biggest challenges for small businesses.
Imprezz provides a comprehensive 360-degree view of business performance, enterprise education, client engagement, and create credit and risk analysis tools to support SME’s in India. It helps your accounting team make the best possible decision to cope with the COVID-19 crisis. Our software is customizable as per your business requirement. If your business is suffering from any financial challenge, feel free to contact our customer support team. Work safe and remotely with Imprezz online billing platform.
Hopefully, our COVID-19 small business guide was helpful for you. We offer a 14 days free trial software program for small businesses in India. Log in to get started!