7 steps to SME survival during the pandemic and beyond
During the first half of the year we have faced a pandemic which has resulted in everything from mobility restrictions, changes in supply patterns, changes in social and work patterns, a significant drop in economic activity…….the list goes on and on.
It fair to say that 2020 will go down as one of the most challenging years from a political, economic, social and technological perspective.
This new reality has meant that we have all had to review our business operations overnight in order to adapt to the challenges we currently face.
Despite the challenges faced across the sector, uncertain times can also create opportunities too. This is something we are seeing with some SMEs, who have adapted quickly to the changes and have been able to take advantage of certain situations (certainly in the short term) to strengthen their position within the market.
Vrio want to help you protect your business, our 7-step guide to survival is designed to help SMEs focus on the key aspects of business survival during the pandemic.
1- Global Vision
First of all, we need to understand the current situation within the business. Analyzing everything from the accounts, turnover, profitability, liquidity, resource planning, well-being of employees and the changing needs of your customers. Are certain sectors impacted more, is there a need for diversification, do you have the skills and resources to access other sectors? These are some of the questions that need to be asked.
By accessing accurate, relevant and timely data, you can build an accurate picture of where the business actually is and what needs to be done to get it to where you want it to be.
2 – Digitalization
Business agility is essential, being able to adapt business practices quickly and effectively. For example, switching from an office-based operation to teleworking has proven a big challenge for many companies.
Automation will also play an important role, reducing or automating many manual tasks will help companies become more agile and efficient in the future. Spending more time analyzing those excels than preparing them is a better and more productive use of time.
With the correct technology, we have seen how effectively a business can transform their operations literally overnight.
One key aspect of digitalization is working in real time, with real time data. Having the ability to take decisions quicker based on accurate real time information could be the difference between survival and failure.
3 – Analyzing business risk
It is important to sell, but not at any price. Maintaining a prudent credit policy when it comes to controlling the outstanding balances of our customers is a critical factor during these times of uncertainty, liquidity is critical for many SMEs.
4 – Access to short-term funding
You also need to have a plan for possible delays in customer payments. It is always important to assess, with the different financial institutions and government support, the possibilities of signing short-term financing at any time. It is also advisable to work with more than 2 banks to ensure you have more than one option available.
5 – Listening to the customer
Now is the moment to listen to your customers more than ever, if you do not then someone else well. With very few exceptions, many businesses are being forced to change and it is essential to understand your customers changing needs to adapt accordingly.
6 – Continuous search for new products or services
Even if a service has always been offered in a certain way, it does not mean that it has to continue to do so, it is important to analyze all customer needs to ensure your product and service solutions remain relevant with your customers, continuing to add value to those relationships is essential for customer retention and new customer acquisition.
7 – Team, Team, Team
Your team are your most valuable resource. It is essential to use this resource effectively, having their input can provide valuable insights into the business. Afterall, these people are your eyes and ears on the ground.
Communication will also prove critical, if your team have it clear about which direction they collectively need to move, this will improve their buy-in and more importantly their willingness to help implement change.