Despite the fact that some businesses experienced growth during the COVID-19 pandemic, I understand that this situation could be tough for most businesses. Some experts are saying this is only the beginning. Whether the pandemic ends within a few months or years into the long-term, business owners need to be ready, reassess, and make changes to their business strategy in order to weather the storm.
Facing this undesirable situation, there a few things I look into and implement:
1. Look at My Numbers
Every good company should have a comprehensive financial statement that allows its management to make a well-informed decision. It’s imperative that I know the financial position of the company, such as revenues, expenses, and cash flows. For company with ERP systems, it would be easier to look at the number and perform business analysis.
2. Understand the Market and Determine the Sales Target
Once I have the number ready, I began with break-even analysis, in which I examined the level of fixed costs relative to the profit earned by each additional unit produced and sold. Thus, understanding the minimum number of sales we should achieve to keep the business afloat.
3. Conduct a Sales Forecast
The pandemic could potentially affect the revenues of our companies. Therefore, I should anticipate the market trends and forecast the sales based on the macroeconomic condition or engagement with our customers. Our customers would be one of the best sources to understand what our market will look like in the near future. If the forecast shows that we are able to sell above the break-even quantity, we can temporarily assume that our business would sustain in the near future. However, this analysis should also be complimented with cash flow analysis to ensure that we do not run out of cash in the process. If the forecast shows that there won’t be enough sales or cash to keep our company running, consider a pivot strategy.
4. Analyze Our Ongoing Burn-rate or Expenses
Look at where my business is currently spending money, and consider which expenses are avoidable. Think about excess marketing, the size of your company, and other non-value added expenses that may be reducible without affecting the quality of our business. I identified which of our business functions are essential to continuing operations, and if those functions are supported by third parties, we should contact them to ensure appropriate measures have been well coordinated.
5. Adapting to the Current Market Trends through Pivot Strategy
I spent some time to understand the current landscape of our market and find a way to optimize our business’s positioning. One way to do it is to look at what competitors are doing and to understand the one who making it through crisis.
One way to pivot is to provide our services digitally. In this situation, many of our customers or potential customers have limited the number of visits. Therefore, we offered a video conference services, from customer support to digital presentation. We should also look at sectors that are still doing well during the coronavirus outbreak. It is possible that our business already has something of value to one of those sectors that you’ve not previously considered. For example, some corrugated boxes company in India has looked into the health sector by developing a box bed, or us in Indonesia, focusing on certain niche market that grows due to increase in product delivery services.
According to Martin Zwilling in Forbes, there some common routes we could take to pivot, such as: customer problem pivot, market segment pivot, technology pivot, product feature pivot, revenue model pivot, sales channel pivot, product vs. services pivot, and competitor pivot. In choosing the appropriate pivoting routes and strategies, I recommend that you start with identifying the key issues, have a careful plan in place, and more importantly, preserve functions and processes that still work.
6. Implement Health and Safety Measures
First and foremost, we must, of course, protect our people. In our company, I developed a pandemic management structure as part of Health, Safety, and Environment Department. I assigned personnel with appropriate authority and competencies; and develop a reporting channel should any unforeseen or undesirable situation occur. Our company should be able to quickly identify whether or not there are employees affected, any report of sickness or suspected symptoms, provide protocols for working from home and revisit travel and insurance policies.
We also invited an experienced doctor to raise the employees’ awareness and to socialize the precaution they should take to avoid the spread of coronavirus. In one online webinar on Tuesday, 12 May 2020, I have discussed how our company treated our employees as a team in dealing with covid-19. With more than 2000 employees, it is impossible for top management to protect the employees from the viruses without all employees’ involvement.
The use of technology will be central to ensure productivity while maintaining social distancing. We can use video conference system like Zoom or web-based ERP system to allow employees to manage their work from home. We also used social media as a communication channel for health education to our employees.
7. Pray and Stay Positive
Finally, I believe that “the Storm will surely Pass” and things will get better. We, as entrepreneur, only need to adapt.