The International Monetary Fund’s latest Global Financial Stability Report indicates that financial systems have already felt a dramatic impact during the COVID-19 crisis. In the United States, one of the hardest-hit countries with over two million COVID-19 cases, the effect of the pandemic on businesses has caused it to register close to 40 million job losses. Most of these job losses are from small businesses. Small businesses are privately owned establishments, enterprises, sole proprietorships with fewer employees, and less annual revenue than a regular-sized business or corporation.
In a Namibian context, the commercial bank’s regulator, Bank of Namibia, in its April Financial Stability Report, states that industries such as tourism and entertainment have lost almost all revenue as a result of social distancing measures.
Combined with the threat to people’s lives and its negative impact on the economy, COVID-19 has caused small businesses to experience fewer customers, decreasing sales, and likely job cuts. As a result, small businesses need to respond appropriately to adapt and adjust to the effects of COVID-19. Nevertheless, as a small business owner, how can your business change to suit the new normal, despite the headwinds?
Analyse the situation
Before taking any concrete action, it is essential to analyse the situation, understand the challenges, and then finding any possible alternative solutions. As a small business owner, you will have to figure out the problems related to your business. Once you reflect on the aspects of your business, start planning on how your business will have to function to make the most out of the situation by drawing up a plan of action to combat the challenges.
How do you do it? Survival strategies are a priority; for instance, setting up a contingency plan to ensure your operations continue unabated. As a small business, you need to understand how to support your stakeholders by understanding the industry’s changing needs and concerns.
Also, market research is crucial, as it influences the strategy and action plans. The more you know about the business trends, the better equipped you are to deal with the changing climate.
Talk to your employees
Your staff members are valuable assets. Take care of them; they contribute to your company’s success. Discuss your ideas with them, and if downsizing is the only option, do it with compassion after exhausting available options. It will show dignity, fairness, and respect.
During this process, communicate expectations, provide clear explanations of the challenges the business faces, and offer assistance, but do not over-promise.
Meet your customers where they are
Despite the inclination to emphasise sales as incomes decline, instead, focus on building and sustaining the relationships with existing customers.
To look for new opportunities, consider reaching both potential and existing customers using online channels, such as emails and social media, web communities, telephonic surveys, in-depth interviews, and focus groups – in consideration of social distancing measures.
Conduct market research, which keeps you attentive to where you can improve and indicates which new ideas will resonate as you listen to your customer’s needs. Figure out how your customer needs have changed and adapt to those needs.
When you conduct research, keep in mind that some customers work from home, resulting in more time participating in your study. Remember, all relationships have an emotional component, which embraces the genuine connection between individuals and brands.
Communicate with your stakeholders and look at your finances
Transparency is crucial to all of your stakeholders. It builds trust and respect and increases their willingness to work with you. Keep them updated on the developments of your business.
With regards to your creditors, negotiate better terms if you are unable to meet your contractual obligations. If you renegotiate your debts with banks, for example taking of payment holidays or temporarily deferring interest payments on outstanding debts, make sure you understand the terms and conditions. Keep yourself well-informed by following relevant news platforms sharing trade policies in response to the COVID-19 Pandemic.
Concerning your cash flow, identify which expenses to put on hold while speaking with financial experts, such as your Bank Windhoek Branch, before making rushed decisions.
Lastly, the nature of responding to the COVID-19 pandemic requires you to step outside of your comfort zone and look beyond traditional operating ways. Understand what you can and cannot control in the space of uncertainty. Adapt your usual processes, and your business will be successful. Do not hesitate to ask for support during these uncertain times.
* Loide David is a Market Research Analyst at Bank Windhoek