World over as countries continue with lockdowns, the scale of the human tragedy that the pandemic has caused is becoming more and more apparent. At the same time, the economic news is also becoming very grim, with major stock markets all over the world in a bear market or close to one, and unemployment numbers beginning to skyrocket.
It is very clear that the world is on the brink of, if not already, in a recession — the first since 2008. As business owners, it is important to plan to deal with the economic fallout of the pandemic.
In the immediate scenario where countries like India are completely locked down, there are of course short-term questions to answer. Most companies are seeing no revenue coming in, and businesses ranging from retail, to food and beverage, to manufacturing, have been hit.
The first question to answer then is how are we going to fund our fixed overheads when revenue is zero. Most businesses plan to have enough liquidity to tide over a few weeks, and now is the time to use those funds. The government’s moratorium on EMIs will certainly help, but costs such as rent, salaries, and marketing costs, to name a few, have to be looked at. There are multiple options businesses can look at.
For instance, renegotiate rent agreements, ask landlords to reduce the rent for the short term, or even pay no rent now and pay, with interest, after business starts again so that landlords don’t lose money.
Changing the focus of marketing and cutting down marketing spends is another way to reduce overheads. Stop spending on online lead generation and ad spends in physical publications as new leads are unlikely to be serviced physically at the moment. Both these spends are a call to action for customers, and with businesses shut, a call to action is meaningless.
Turning digital marketing focus to brand building, product information, and messages around COVID-19 helps keep brand awareness high in customers’ minds. So, when businesses reopen, they come back to you.
Also, work out a strategy where your reliance on exhibitions and trade fairs to source customers is reduced as there is no clarity on how long social distancing is going to continue.
Use work from home effectively. In times like this, keeping employee morale high is the key. Engaging in training seminars, video calls, product quizzes, and staying in touch with your teams regularly helps in this regard. Sales teams can stay in touch with key accounts, in turn by sharing product information, system designs, and training presentations. With everyone sitting at home, upgrading skills is a key area to focus on.
Think about employee welfare. While it may be tempting to reduce salaries or start layoffs, I don’t believe that is the way forward. I’ve always subscribed to the notion that a business has three legs in order of importance – people, market, and product.
As business owners, we expect our employees to put in long hours, travel away from their families, and put their work and therefore our company before everything else. Now is the time for us to look after the people who work for us. When a company steps up at a time like this, it builds loyalty, commitment, and long-lasting teams.
Remember, economic booms and busts are always cyclical. The COVID-19 pandemic and the associated economic downturn too shall pass. And once they do, it is the companies that have invested in the right brand-building exercises, team training, and, most importantly, employee welfare that shall stand poised to ride the crest of the next economic wave.
(Edited by Apoorva Puranik)
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
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