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The outbreak of COVID-19 has caught entrepreneurs around the globe by surprise. SMEs are particularly hard-hit. This article aims to provide SME entrepreneurs with some tips on how they can navigate their businesses through this challenging time:
- Determine the financial health of the company
Understanding the company’s financial position is the key to kicking off a successful plan for business recovery. Having the financial statements up-to-date can help SME entrepreneurs to determine the financial health of their companies and make informed decisions on the company’s direction and resources allocation.
- Evaluate how your market has changed
The market used to be so familiar to SME companies might have changed since the coming of Covid-19. To stay afloat and maintain competitiveness, SME business owners are advised to maintain close contact with their customers and suppliers to see how they are doing in the face of the crisis. Speaking to these important stakeholders might give SME entrepreneurs insights as to how they can position the SME to accommodate the latest development.
- Review your business model and consider a backup plan
While the negative impact of the pandemic could be depressing, it might nevertheless be an opportunity to review the company’s current business model, research on the needs of the market, evaluate the company’s strengths and weakness and be in a perspective on how to achieve the long-term goals. Establishing a backup plan is also a vital to ensure business continuity under challenging conditions.
- Stay tune with governments’ relief plans
Governments are offering relief measures to SMEs. Here are some relief support offered to SMEs in different countries:
- Hong Kong – A reduction of the profit tax by 100 percent (subject to cap) and low-interest loan of up to HK$2 million for SMEs. (Details: https://www.info.gov.hk/gia/general/201908/15/P2019081500648.htm?fontSize=1)
- Singapore: Deterred payments are on offer for SME loans. In addition, the Monetary Authority of Singapore also intends to reduce the interest rate for new SME loans. (Details: https://www.mas.gov.sg/-/media/MAS/resource/covid-19/Details-on-Financial-Industry-Support.pdf)
- China – A number of important initiatives including leveraging monetary tools and encouraging SME firms to go public are set to be implemented. (Details: http://english.www.gov.cn/statecouncil/ministries/202007/25/content_WS5f1b8fe0c6d029c1c2636a94.html)
- Philippines – Loans with a longer grace period, relaxed credit requirements and tax incentives will be provided to SMEs. (Details: https://www.dof.gov.ph/dbp-offers-financial-support-to-covid-affected-coops)
- Thailand – The Ministry of Finance, with the approval of the Cabinet, is to implement a stimulus package worth up to 400 billion baht including low interest loans, reducing interest rate, debt payments extension and reduction of withholding tax to aid entrepreneurs, especially SME.
These immediate and substantial relief measures can lessen the financial burden of SMEs to a reasonable extent and give a breathing space for SME to bounce back in the near future.
Last but not least, it is also worth noting that speaking to a competent business consulting/ solutions company on how the operation of your SMEs can be enhanced, streamlined or outsourced can help with efficiency and cost-saving.
If you wish to discuss/share your proposal with us, please do not hesitate to leave your inquiry at contact@orbis-alliance.com and a member of our team of experts will get back to you shortly.