The novel coronavirus has caused thousands of deaths around the world since it first emerged in China last December. Companies are feeling the impact of the virus, as customers stay home and large-scale social gatherings are postponed.
As the global pandemic rages on worldwide, companies will have to act decisively and preserve through the tough times. How can businesses cope with a crisis like this?
#1 Building Up Strong Emergency Savings
Businesses with low cash reserves or unstable cash flows are particularly vulnerable in a pandemic like this. In fact, liquidity crunch is one of the main concerns that SMEs have, shared during a Singapore Chinese Chamber of Commerce and Industry (SCCCI) roundtable on March 5.
With the slowing economy, you should review and adjust your cash flow forecasts – how will the reduction in revenue impact your ability to pay suppliers and repay debt?
In the short term, you’d want to strategically manage working capital and defer non-essential spending. Under normal business conditions, companies might choose to focus on profits and losses. But in times like this, you might want to consider shifting priorities to cash management and liquidity.
Explore your financing options to ensure that lines of credit remain available should you require them. Banks are introducing liquidity relief measures to help local SMEs address their urgent cashflow concerns, such as the Temporary Bridging Loan for SMEs in the tourism sector. For non-tourism industries, banks like OCBC have extended bridging loans in the form of additional working capital financing and rolled out additional initiatives to support businesses.
If anything, the worldwide pandemic has shown that it’s still crucial for businesses to have an emergency fund. Whether these funds help to keep your business running during slow periods or to tide through a black swan event like the COVID-19 outbreak, it provides the financial stability to pull through any obstacles.
#2 Stay Relevant In Changing Times
When the world changes as rapidly as it does today, one of the greatest challenge that business face is about staying relevant. Some businesses are very good at this. But for others, not so much. It might take a crisis like this to hit before it reveals the company’s blindsides.
For instance, security services company Ademco Security Group ‘went to cloud very, very early’. At a post-Budget roundtable, the group’s managing director, Toby Koh, shared that it has sped up their processes and enabled service delivery a lot faster.
“In a case like the Covid-19 right now, every single one of my team can work from home,” said Koh.
For businesses hit by the slowing economy, take this chance to reskill your workforce. With change as the only constant, learning should not be a one-and-done process, but a seamless cycle for everyone. Employees can tap on their SkillsFuture credit to pick up new skills and stay employable. And with the advances in learning technology today, picking up new skills with online courses is affordable and accessible on platforms like Coursera or Udemy.
The main point is about adapting to current times. Know the trends heading your way and devise a strategy to tackle them. You don’t want to be shaken up only when the next crisis hits.
#3 Be Agile In The Way We Work
The global pandemic is changing the way we live and work. Companies are forced to implement flexible work schedules, be it employees working from home or staggered arrangements. For such changes, companies must be flexible and cope with changes.
For instance, retail stores are cutting store hours or cutting down on their to reduce labour costs, while others are moving into e-commerce to cushion the blow. How can your business adapt quickly to the slowing demand caused by the pandemic? If your retail store is experiencing slowing sales, this could be a good time to begin the renovation work you’ve been putting back.
Downturns can present opportunities too, but to realise them, companies must be agile and willing to pivot their strategy. With businesses taking a hit from the virus outbreak, clients, suppliers and customers alike are less active in operations. This can be timely to tune in to ‘important, not urgent’ goals that have always been neglected in favour of day-to-day operations, e.g. exploring alternate revenue sources, building team culture, or trying out a remote working arrangement.
Open A New Business Banking AccountLooking for a bank account for all your business transactions? The OCBC Business Banking provides a wide range of business accounts for you to choose from so that you can find the most suitable account for your business needs.
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