By now we are all aware of the deadly Coronavirus and how rapidly it is spreading. Roughly 13,000 new cases are being reported every day, and the world is grappling on how to survive and fight this pandemic. From the rich to the poor, everyone is unsure of how to tackle this menace. Businesses are equally impacted because of the nature of this virus where people are advised to dwell in isolation.
Business owners/entrepreneurs are one of the most at-risk populations who have already started facing the brunt of this natural calamity. In China, retail sales have been dropped by 20.5%, while the unemployment rate increased to 6.2% in the month of February. Apple has temporarily shut down all its retail stores, which implies there will be a significant reduction in profit and income. On the other hand, Virgin Atlantic has declared an 8-week unpaid leave to its employees. The travel industry is expected to be at a loss of approximately 820 billion dollars. According to research, COVID-19 may cost the global economy $2.7 trillion.
When the top MNCs like IBM, Facebook, Google, etc are unable to fathom how to overcome the challenges thrown by this pandemic, then we can just imagine what small businesses might be going through. Be it a small tech company, an agency, MNC, startup, restaurant, or a store, everyone is scared and at a total loss, unsure how will they earn their income if everything remains shut for days on end.
What challenges are start-ups, emerging companies, and agencies facing during COVID-19?
According to a survey by LocalCircles, this pandemic has put all the early-stage start-ups, funding dependent start-ups, agencies, and emerging companies into a major crisis. Right from fundraising to managing employees’ salaries, most companies are struggling to cope with this menace. Around 71% of small businesses and start-ups are facing major challenges due to the reduction in demand for products and services. This is eventually leading the companies to cut down their marketing and advertising expenses. Many companies have even temporarily suspended operations, while few have asked their employees to work from home.
Consumer-based companies
The co-founder of the Pune based consumer-focused start-up – “True Elements” - Sreejith Moolayil explains the challenges faced during COVID-19. Since 40% of his production staff have moved back to their hometown, the company is not able to meet the requirements despite receiving a huge demand for its online health food products. He also states that the 15 days’ lockdown implies absolutely zero cash flow during the lockdown period.
TheWowBox – A Mumbai based company promotes entertainment events and distributes newly launched products to different companies. Since consumers are buying only the basic necessities, their products worth lakhs have almost expired in the warehouse. Nikunj Bubna – founder and chief executive officer (CEO) of TheWowBox also states that the lockdown has impacted their fundraising process and put an end to their promotion initiatives.
Travel Industry
The travel industry is facing a major crisis after the Government restricted international travel plans. As a result, flight bookings and hotel bookings have been significantly curbed. Around 35% of flight and hotel bookings done from India to International destinations have been canceled by the companies. Sabina Chopra - co-founder and chief operating office at Yatra Online Pvt. Ltd stated that they have been receiving cancellation requests from travelers. Also, hotel rates have been dropped by 18%, and there has been a 40% drop in the airfares. Similarly, Ola, Airbnb, and Uber are experiencing a major drop in demand.
IT Sector
Since the 15 days’ lockdown has caused all the IT professionals and freelancers to work from home, the Co-working spaces in Bangalore and Gurugram are facing major challenges and will continue to face during the coming weeks. Also, many emerging companies are facing issues with communicating with their team members and customers. Business meetings and conferences have either been cancelled or postponed. Wealth management startups have started witnessing a drop in business, as people avoid investing when the market is volatile.
E-commerce Companies
Since the demand for grocery and food products in metros have suddenly risen, the online retailers, grocery and food delivery companies are facing major challenges due to the rise in demand. Top grocery e-retailers like Dunzo and BigBasket are automatically delaying/canceling orders due to a supply crunch.
Several Indian pharma companies depend on Wuhan for the supply of active pharmaceutical ingredients. Hence, these companies are facing a major supply crunch as the Chinese city of Wuhan is completely locked down. Also, various other medicine delivery startups are facing issues due to the sudden rise in demand for drugs, hand sanitizers, masks, etc.
Several E-Commerce companies like Styched are struggling as there is a significant reduction in the supply of fabric that was imported from China.
Can we allow our business decisions to be driven by fear?
Small businesses are most vulnerable, as most of them do not enjoy the backing of an investor. Therefore, most of them are making decisions out of fear that will surely impact them negatively in the future. Well, it is a tough situation for the entire world but irrespective of how bad things seem, we cannot allow this adverse situation to drive our business decisions. COVID-19 Virus has also led us to think differently and try and look at the silver lining even in this difficult time. We can either panic or choose to learn, adapt, and do our best.
So how do small businesses survive in the time of COVID?
The biggest scare right now due to the coronavirus is how will small businesses survive. Right from startups to emerging companies, every small business is bound to experience long-term business consequences. However, small businesses can definitely survive and sail through a difficult time if they keep in mind and follow a few essential steps. All you need to do is identify your challenges and come up with solutions accordingly.
Identify your challenges
What are the challenges your business is facing right now? The first and foremost thing to do is make a list of all the challenges so that you can find solutions to each of them. It could be difficulties in internal communication with your team, supply crunch, shortage of resources, communication with your customers, and issues with generating new leads, etc. List them all and strategize by taking even the worst scenario into consideration.
Reinvent and adapt accordingly
The best thing every small business needs to consider right now is to adapt to the situation and make certain changes. Question yourself, “What does my client need right now?” “How can I meet those needs?” Brainstorm and come up with effective ideas for coping with the present situation. For instance, the challenge faced by the Pune based consumer-focused start-up – “True Elements” caused them to move their production to a small town, about 200 km away from Pune. Delivery and service startups like Swiggy, Grofers, and Urban Co have promised to provide free medical consultation and full insurance cover to the delivery staff. The cosmetic company in Wuhan - Lin Qingxuan shut down its stores but used online platforms like WeChat for engaging its customers and increasing online sales.
Since many people are wondering if certain businesses are still operational, it is important to make the necessary amendments to your services. For instance, many restaurants and cafes are offering free home delivery, weekly/monthly subscription deals, discounts, and much more. These strategies will definitely help your target audience know that your business is still functioning.
Follow remote working policy
With the latest technological advancements, it is quite convenient to implement a remote work policy. There are plenty of free work collaboration tools like the “Workplace by Facebook” where you can stay in touch with your team without any hassle. Also, you can use various group communication tools like Zoom, Microsoft Teams, Slack, Google Hangouts, GoToMeeting, etc
When it comes to attending conferences, many companies are using the online platform - “Run The World” set up the 2 former employees of Facebook. This platform with its advanced features like Zoom video, Twitch interactivity, Eventbrite ticketing, and LinkedIn networking is helping companies attend conferences remotely during the COVID-19 crisis. Another good example of remote conferencing is “Hopin” that supports live-streamed presentations along with virtual networking features.
Focus on digital marketing and generating leads
While many businesses are struggling with running normal operations, it is a good time to invest in content marketing. It is rightly said that the right time to double down is when others are not. In simple terms, now is the time to create bulk content for your business so that you will reap the rewards at the right time. Only during an economic downturn, you will have relatively lesser competition and you will witness faster results for your marketing efforts. Focus on generating new leads today so that your business will have a bunch of potential clients once things calm down.
Wrapping up…
Coping with shutdowns and social distancing is definitely a major challenge for all small businesses. However, there is a way that small businesses can survive through this pandemic if they find creative solutions. Also, make sure you revamp your marketing strategy to stay ahead of your competitors. Don’t lose sight of your business, now is the time to work on your marketing goals.
Penned By: Aanchal Patil
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