COVID-19 or coronavirus has taken an unprecedented toll on businesses all over the world. While giants like Amazon and Flipkart can pull through, the real risk of a shutdown is faced by small-scale businesses and start-ups. These types depend on physical customers and an alive pipeline to continue running. When social distancing becomes a reality, they face a sharp drop, which can lead to shutdowns.
(Source: The Hindu Business Line)
Innovation is required to thrive in these conditions. Businesses need to take thoughtful measures to stay afloat. And those who do; will come out stronger than some already thriving enterprises which could not adapt to these changing conditions.
Let us take a closer look at how businesses can invest in measurable and productive actions to remain in profits. These actions will also help them to not resort to firing the employees to cut their costs and contribute to the mass unemployment problems all over the world.
Ensuring you remain well-stocked keeps you in the business. If you are a cosmetic company, for example, you need the stock to keep yourself running. However, this is not to say that you hoard the inventories. The objective is to ensure you have enough, yet, are not holding more than necessary. When individual or bulk orders come in, you must always be in a situation to respond to them.
You can also convert your inventory into cash. If you have a sound inventory management system in place, you should be able to see which products move slower and which ones are pacing faster. Produce or procure fewer of the slow-moving products and save. This holds suitable for service businesses too. Take a note of the services that are no longer in rapid demand and cut down on the resources that you need to provide those services. You can use the same method to analyse and eliminate any business aspect that eats up cash unnecessarily without producing the desired outcome.
It can be easy to lose yourself in the production aspect and not focus on the customer as much. Do not make this mistake. Your customers are still the most essential cog in your well-oiled machine. You need to strive to maintain good relations and must have sturdy customer service processes in place. Most customer service happens remotely and saves a lot of administrative costs.
Stay in touch with your customers. Use emailers and newsletters to send out important information and pronounce your presence. Create a social media presence and keep posting meaningful messages regularly. Make yourself relatable by reaching out to your prospective customers to help register your brand in their minds. As a start-up or small business that has not been in the game for too long, this online spread is necessary and at the same time, extremely cost-effective. Any big or small business that has not made the online shift during a severed economy will suffer adversely in the long run.
Speaking of advertising, you need to be smart with your ads. The weaker economy means that your spending potential has reduced. While ads are essential to your business, they are not fixed costs. Opt for the mediums where you can reach the maximum audience at lowest costs. Online remains the most productive advertisement medium in such cases. Social media platforms and blogging are proven ways you can attract your prospective customers without spending a fortune on promotions. Thus, you can adjust what you spend on advertisements without incurring major expenses. You need to be smart about it.
Create ads that are minimalistic and cost less money. You can spend more on ad spaces instead so your ads are seen. Make them relevant, especially to the current conditions (living through a pandemic, social movements, etc.) and get people’s attention. E.g. most companies have switched to maximising the production of essentials. Do the same. As a company, you must cater to people’s needs. Instead of engaging in clever, gimmicky ads, use direct advertising to give people (and promote) what they need.
With work-from-home currently the world’s default setting, employers have started paying attention to their employees’ needs more. By paying such attention, they can also bring their employees into business decisions that affect them the most. You should take a similar approach, especially if you
already have a small staff.
(Source: Data Privacy Manager)
Arranging regular staff meetings can help boost morale and work ethic in a situation where the environment is not conducive to productivity. You may introduce activities and sessions that help your employees and their mental health during a time where there is no separation between home and office. This way, the employees also feel like they are still crucial to the business and not disposable. You need to show them that they are not facing the risk of layoffs and discuss cost-cutting measures with them instead.
The best way to keep your finances intact is to lower any chance of debt burden. This comes back to the importance of the customer in maintaining a profit margin. During times of recession, using various incentives like repayment schemes etc. can help your clients trust you more.
(Source: Financial Times)
Simultaneously, investing in heavy-duty, expensive capital is not advisable. Especially during a time when production is not going as smoothly as it otherwise would, spending on capital for increased production may seem like a good idea. However, this is not the case. Production is not slowing down because you do not have the equipment. It is slowing down due to economic conditions outside your control. Recognise this and spend your money sparingly.
Finally, three main points will keep you ahead of the curve.
The methods we have laid out before this are all ways you can achieve these final points.
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