The Coronavirus pandemic, as declared by WHO, has affected human lives on a global scale. Millions have been infected, thousands have died, and the world has come to a dead stop. Even in India, the entire nation is currently under lockdown.
While the situation seems dangerous, we have to be optimistic and start thinking: what next? A month-long lockdown can be disastrous for the economy, and perhaps, more so for small and mid-sized businesses. The number of SMEs in India is estimated to be around 42.5 million, employing about 106 million people. So, efficient planning and careful analysis of the future steps are required for the SMEs to fight these challenges and overcome them.
Steps to Overcome Financial Crisis for SMEs
If you are one of the small-scale or local business owners, it is not the time to worry and start taking the logical approach to problem-solving by following this 5-Step-Guide:
Step 1: Start Preparing Early
Early preparations always help, and it starts with a two-way approach: internal and external. Since a business includes the chain of suppliers, retailers, etc. along with the customers, the administration has to be in regular touch with them to waive off any fears. If your business has ecommerce stores, now is the time to boost it.
Internal preparations are a bit trickier. One of the main challenges might be access to cash. After paying the rent, payroll, and utility bills, very less liquid cash is left at disposal. Now, with the loss of sales, the crisis is more severe. So, it’s time you try out digital payment methods as well.
Step 2: Small Business Administration Loans
Small business administration loans are offered by state governments and the Center as well as private banks and organisations. In the wake of the coronavirus, more such relief loan options are likely to be made available by the government to save the small industries. It is important to be informed about these opportunities and avail them if the need be. At the same time, while opting for these loans, it is important to consider the repayment schemes.
Step 3: Right Marketing
For a local food store, even after the lockdown ends, people may be skeptical about visiting due to hygiene fears. On the other hand, for a small gold shop, even regular customers may avoid any immediate investment. Now, it comes down to the marketing of the business to convince the customers to return to the shop. While social media can definitely help, shop owners can individually call their customers or send text messages to earn back their loyalty.
Step 4: Adopt Technology & Modern Resources
The biggest benefit of modern technology is that they are easy to use and cost-effective. Social media marketing tools can be used to generate more sales, while crowdfunding options can also be explored to support the business. With online crowdfunding, loyal customers have an actionable way of contributing to their favourite businesses.
Step 5: Cutting Down on Staff Costs
The last and most dreaded step might be cutting down on staff costs. This includes considering pay-cuts or layoffs. While these should always be the last resort for a temporary financial crisis, other solutions could be outsourcing or hiring part-timers or fresh recruits for any additional tasks at present.
A quick business loan may be an intelligent solution if you are facing financial challenges in your business. For an easy application process and quick loan disbursal, contact Gromor Finance!