While the pandemic has brought about many challenges to the business community, the situation is not without hope.
Businesses can survive and overcome the impact of COVID-19 by implementing measures that can help fortify their competitive edge and maintain their profitability even during difficult times.
Here are my top six action items I recommend to entrepreneurs who want to make sure their businesses thrive in the midst of a challenging economic climate.
1. Be Agile
Business agility is the ability of a business to swiftly respond to changes to continue its offering to customers with minimal disruption due to external forces, whilst maintaining continuity.
According to research done by the Massachusetts Institute of Technology (MIT), agile firms can grow their revenues 37% faster and generate 30% higher profits compared with non-agile companies.
However, MIT noted that the usual stumbling blocks to business agility are slow decision-making, contradicting goals and priorities, unwillingness to take risks, and lack or inaccessibility of information.
Businesses are bound to encounter challenges, and the pandemic is one extreme global example. Having enterprise agility can help you quickly think of ways to rise above any challenge, whether it’s innovating your product or service, finding opportunities in the midst of a crisis, or simply going back to basics, such as improving customer experience.
TIP: Develop contingency plans for different scenarios and formulate strategies that can help future-proof your business. When needed, you can adapt these strategies depending on the situation and ensure your business can withstand any storm.
2. Go Digital
COVID-19 has forced businesses to operate with a remote workforce, highlighting the importance of being not only agile but digitally operative too. We’ve all had to shift things around, ensure we have access to shared servers and cloud storage and be mobile. Gone are the days of being stuck with a desktop and a landline.
We simply need to ensure we provide our teams with the necessary tools for a remote workforce and create a system or infrastructure that de-centralises the work environment.
Aside from shifting the traditional work environment to the digital sphere, it is also important to implement a digital transformation of your services.
How many of us have had a massive influx of SMS campaigns heralding the advent of online groceries, for example? I would hazard a guess and say everyone reading this!
During the lockdown, almost all businesses had to temporarily close, except for essential services such as grocery stores. These businesses could not just shut down, as people still needed daily access to food.
Although ecommerce has already been a growing sector in the UAE, the lockdown amplified the need for this industry.
In fact, Arabian Business reported that the UAE saw a 560% surge in online grocery searches in April, approximately a month into the lockdown.
Grocery stores also had to completely revolutionise their services and, with the consumer in mind, they started to offer “contactless” solutions.
Another example is how consulting businesses, which can no longer provide face-to-face consultations as per their standard business models, have started to hold webinars and virtual meetings to meet their clients’ needs.
There is now, more than ever before, a call to invest in technology to access consumers easily and ensure online visibility. Businesses must boost their digital footprint by diverting funds from more conventional methods into effective digital strategies.
3. Be Cash Savvy
I cannot stress enough how important it is to avoid knee-jerk reactions in response to adversity. Many businesses immediately foresaw or experienced a reduction in revenue and immediately reduced arguably one of their biggest expenses – payroll.
Theoretically, this makes sense, but only in the short term.
By terminating staff, yes, a business can temporarily save; however, if you have a small- to medium-sized team, this is not sustainable nor conducive to providing effective customer service or generating strong sales.
The smarter thing to do is to revise your payroll structure and implement incentive schemes that keep your team motivated whilst serving mutual benefit. Who doesn’t love a win-win situation?
Other quick tips that can help improve your cash flow management include:
Develop a treasury plan and include cash management as part of your business risk and continuity plans.
Minimise variable costs, such as non-essential travel, meetings, training and hiring.
Re-evaluate your investment plans. What expenses or projects can be postponed or reconsidered?
Create new revenue streams. Out of adversity arises opportunity. What product or service can you develop to meet the needs brought about by adversity?
Consider liquidating assets, if available and if ROI permits.
Ask for discounts! If you don’t ask, you won’t get it. So, if you have the opportunity to negotiate better deals from suppliers, do so. Having some cash is better than nothing.
Improve staff planning. In situations like this, the talent available is more affordable than in the good times. Hence, it is the right time to recruit experienced people and build your team.
In the future, ensure there is a fund for liabilities that simply cannot be avoided. One example is gratuity payments, which are mandated by UAE Federal Labour Law. Many businesses do not plan for this in savings and/or liquid investments and fall short of providing this when the time comes for it.
Consider alternative financing options, such as government relief or stimulus programmes (more on this later).
4. Use the power of word of mouth
According to Invesp, 88% of consumers trust word-of-mouth recommendations from people they know, while another study indicates offline word of mouth can increase sales by about 20%.
These numbers point to one thing – people are most likely to get products or services recommended by people they know.
Make this work for you by leveraging your contacts and connections, where possible. One way to motivate your customers, employees and other people to refer you is by giving them incentives for every referral. For example, Deliveroo offers a AED 50-discount on your next order if you recommend a friend.
Some banks offer up to AED 2,000 as a reward when you refer someone for a credit card.
These incentive programmes offer an affordable, cost-effective solution with huge, long-term rewards for your business.
5. Explore available economic stimulus packages
Be aware of what the government is offering to help businesses get through the pandemic, such as:
Reductions in market and customs fees
Deferment of loan payments
Reductions in lease payments
In Dubai, the government has earmarked a AED 1.5 billion economic relief package, whilst the UAE Central Bank has raised a stimulus package worth up to AED 256 billion.
As part of its commitment to support SMEs, Virtuzone launched Stand Together UAE, an initiative that gives UAE-based businesses free advertising opportunities. On this site, https://standtogether.ae/, businesses can publish their special offers, free of charge.
6. Stay Positive
Do not underestimate the importance of looking after your physical and mental health and that of your teams.
A clear head will make conscious decisions that will help pivot your business to the best path. Here are some tips to stay on top of your game:
Meditate, practice yoga and exercise to help ensure you stay calm and positive.
Ensure you eat well and get enough sleep. Adding sickness to the equation can cause you further stress and delay your work.
Network and socialise, even if remotely. There’s a lot to be said for camaraderie and reminding yourself that you are not alone. In fact, health experts say socialising can help improve one’s memory and cognitive skills.
Maintain a work-life balance. As more and more people are working from home, not everyone enjoys this flexibility. Identify what works for you; it might be taking a quick one-minute break to walk around before getting back to your work station. Essentially, your well-being must be prioritised.
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