COVID-19 is an unprecedented situation impacting the lives of billions of people with more than 1/3^rd of the world currently under lock down. SMEs are one of the most impacted segments given they, unlike large Corporates, often lack (i) the financial resources to withstand significant strains on their cash flows; (ii) the preparedness to respond to disruptions like these with Business Continuity Programmes. Also, most SMEs are still traditional or in the early stages of digital adoption. SMEs also employ majority of the workforce, mostly informal or casual workers leading to a more acute downstream impact.

As SMEs, you are part of a really enterprising community which possesses a great will power to deal with a crisis like this. 

The intent of this article is not to undermine the significant challenges that SMEs are going through. However, as Winston Churchill once said “The pessimist sees the difficulty in every opportunity. The optimist sees the opportunity in every difficulty”, I am sharing some thoughts to kindle the optimist side of SMEs. As SMEs, you may not have ample financial resources at your disposal; however, you are part of a really enterprising community which possesses a great will power to deal with a crisis like this.     
 

1. Once you have attended to the immediate challenges of lock-down including your and your staff’s safety, do take the time to ‘reflect’ on things you could have done differently if you had more time to prepare for the lockdown. Recovery may not be quick and a possibility of a recurrence in near term cannot be ruled out. Hence, it still may not be too late to implement those measures. Examples include being digitally empowered with an e-store or availing banking services digitally, better financial planning to ensure better cashflows to withstand disruption, etc.
   
   
2. Use the time to ‘build’ new connections, ‘strengthen’ existing relationship with buyers and suppliers. You will get a pulse of what’s happening in your supply chain, what’s the situation with your key counterparties, their position and their action plan, etc. Don’t worry about being asked for ‘favours or help’ if you connect, inevitably you will also need some. Map your buyers and suppliers along the dimensions of their criticality to your business and their ability to help you.  
   

   Use the time to ‘build’ new connections, ‘strengthen’ existing relationship with buyers and suppliers. Don’t worry about being asked for ‘favours or help’ if you connect, inevitably you will also need some.

   
   
   
3. Your business is your life, it’s your dream, it’s your passion. I am sure in some ways; your employees played a big role to bring life to your business. Be sensible but don’t be tempted to take measures which are purely short sighted. ‘Empathy’ and ‘support’ with key employees in these difficult times will win lifelong trust and loyalty.
   
   
4. With COVID-19 becoming a global pandemic impacting almost every country on the planet, it’s clear that there will be significant shifts in the business models and the way commerce is conducted. Based on early indicators, it feels like there will be a horizontal push for digitization across all industries to reduce dependence on physical infrastructure; shifts in supply chain to diversify dependence on single country, region or market; demand for essential goods, protective gears & digital services will remain at elevated levels; emergence of new opportunities to support business continuity. ‘Strategise’, be prepared to reinvent your business model to either capitalize or withstand these tectonic shifts.
   
   

   There will be a horizontal push for digitization across all industries. Be prepared to reinvent your business model to either capitalise or withstand these tectonic shifts.

   
   
   
5. Of the above, the most obvious shift is an acceleration in ‘Digital Adoption’. This could be for the services that you as SME offer (e-store, e-tender, accepting digital payments) or the services that you as SME consume (e-Procurement, Cloud Accounting, Quality Management, Logistics, Payroll, Banking, etc.). Besides digitizing the processes, also think ways of creating the Digital Identity or Brand and the Digital Trust for your business.  
   
   
6. Undoubtedly, the most challenging aspect is to ensure adequate ‘financial resources’ to weather this perfect storm. Do your financial planning for the next 6-12 months considering 2 or 3 recovery scenarios, understand the hotspots to your liquidity and cashflows. Use your financial resources wisely and if necessary, seek support from your buyers or suppliers proactively as it may become more difficult if the situation gets worse.  Do know your ‘safety net’ so that you can respond to worst case scenario.     
   

   Do your financial planning for the next 6-12 months considering 2 or 3 recovery scenarios, understand the hotspots to your liquidity and cashflows. 

   
   
   
7. Look out for the support programmes and other relief measures by the Government, large corporates or other institutions. Going by experience of financial crisis, there certainly will be a number of coordinated efforts to support SMEs who are the lifeline of most economies. Do not unnecessarily shop around for financial products that will likely impact your credit score. While most lenders, given the economic situation, will expect and accommodate a drop in the credit scores across the board. However, in the absence of strong credit guarantee programs, they are also likely to be very cautious on the viability of the business and the current levels of debt leverage.  
   
   
8. Don’t be shy of sharing ideas or best practices to cope with current situation with ‘fellow SMEs’. Again, it’s an enterprising community, you are likely to only gain by doing so. There are a number of platforms or online communities which are focused on SMEs.
   

   Don’t be shy of sharing ideas or best practices to cope with current situation with ‘fellow SMEs’. It’s an enterprising community, you are likely to only gain by doing so.

   
   
   
9. While it’s too late to look for any Business Insurance cover, do think of possible insurance options in the future to protect yourself from financial losses due to business disruption, stock loss, etc. Technology has enabled Insurance to be offered in sachet-sizes suitable for SMEs. Also, there are new and innovative insurance products to specifically support ecommerce and other digital business models.
   
   
10. And yes, don’t forget to make the most of the lock down by spending time with your family. In your endeavor to follow your passion and to fulfill their dream, you may not have spent quality time with them.   

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