A New Dawn for Small Businesses
As we step into our new world, seemingly blind, we begin to build our post-corona lives, meaning the choices that we make now are momentarily becoming the cornerstones of our next normalities. Ahmed Osman, President of the International Council for Small Businesses (ICSB) and a small business owner, brings us to front our reality and then urges us to look further. His particular position within our current situation as an entrepreneur, centered in the realm of micro, small, and medium-sized enterprises (MSMEs), coupled with his leadership position as the head of a renowned international organization, allows him to be at the forefront of both global knowledge and MSME reality. It is thanks to this perfectly situated go-between that we can begin to think about how we might “imagine a new dawn for MSMEs globally and reimagine purposeful and meaningful startups.” This then permits us to think about working in the future, including ways in which MSMEs can learn from this pandemic to create their new normal.
In understanding that starting and managing a business is stressful and painful for both the entrepreneur and those around them, it is clear that MSME owners need a particular skill-set and attitude to start and hold business. As start-ups have only a 20% success rate, entrepreneurship needs to be initiated with meaningful intention to be successful. In imagining how things could continue or become different, we are reminded that the new limitations are not just physical, but more so founded in mentality, meaning that changes have crept into every ounce of life and will continue to as we move forward. Therefore, Ahmed Osman offers us six critical factors for every MSME and start-up to keep in mind as they move into the realm of post-COVID-19.
The first mode of operation in this new world must be surrounding financial assessment and security. For MSMEs, they must assess their current situation. By collaborating with their Accountant or Financial Advisor, they can better understand the deficits, future inflow of funds, potential expenses, and liabilities of their current enterprise. From this, we can work to create a new six-month action plan, for which we need both “reliable and accurate information about government relief packages, financial support initiatives,” and investor opinions before executing the newly designed financial strategy. As reality guides this “financial health check,” companies can then decide whether they need to make “potential pay cuts, pull back on investments related to infrastructure or expansion, [or] halt new recruitments,” which then, once effectively communicated, can be initiated.
Next, businesses must re-evaluate their business plan based on their financial assessment, the risks, and their revival strategy. Within these uncertain times, our pre-COVID-19 business plans can not guide our businesses in the way we need them to. Therefore, by “redefining business goals and planning a more realistic and well-rounded growth plan,” we can then integrate all involved stakeholders, including employees and external investors. With all stakeholders reaching mutual agreement, this three to six-month plan will depend on the “company’s current financial situation and will most likely include defers in funding rounds, acceleration in private equity funding, or new collaborations and business partnerships,” which will all help to achieve the renewed business goals.
The third method for MSMEs at this moment involves creating a robust digital ecosystem. One in which both employees and customers can engage. By becoming empowered digitally, businesses must transform the preconception that a digital platform is a luxury. It is now a necessity for almost every company wanting to survive in current and future climates. Your business’s digital engagement will not only help “positive brand recall,” but also assist in generating business, especially for those in retail. Additionally, an active social media presence can work as a “magnet for consumer and stakeholder engagement, not only in times of social distancing and lockdown,” but also for the foreseeable future. This impressive digital ecosystem must also support remote working while upholding data protection as well as the productivity and well-being of employees.
The fourth way in which MSMEs can advance into the post-COVID age is through adopting the Fourth Revolution for Businesses. By leveraging modern innovations in technology, MSMEs can find simple ways in which they can incorporate these strategies for a higher return on investment in the long-term. With a “well-planned strategy, a technology-enabled, highly productive, next-generational business” can be created by mapping out a two to three-year plan. By implementing this urgently, a business’s post-COVID revival could help accomplish short-term growth goals and effective mitigation strategies for future disruptions.
Next, it is essential to note that businesses now know that they can rely on less physical space and assets. Remote working is no longer for the young, millennials, but rather a real, active, and productive mode of operation. In interacting online, physical meetings can be held much less often, which can lead to a “dramatic reduction in office space, meeting room size, as well as fewer overhead costs associated with security, utilities, and insurance.” As this pandemic has already pushed many to both produce and consume from home, these trends will dramatically alter the physical space necessary to run a business for services, retail, restaurants, and tourism. Pre-coronavirus, we saw an incredible decrease in the amount of privacy allotted to individual employees, especially with the augmentation in open office plans, which was initiated after the last recessions as companies attempted to “do more with less space,” or to densify their offices. We will see a reversal in these practices as they no longer fit the code for current sanitation and health policies.
Lastly, MSMEs much put in place a crisis management strategy, which will work to consider both “immediate and long-term impacts.” Therefore by creating a back-up financial plan, an emergency fund, in addition to a robust digitally enabled ecosystem, we can ensure a maximization in productivity, even in the wake of a crisis. We need robust revival plans to support MSMEs during and following moments of uncertainty, like the one we are currently situated in.
In using reason, even in times of panic, these methods can assist businesses as they envision their futures. With risk management and intentional reflection, we can begin to think globally and act locally. These actions, for example, supply chain diversification, can allow us to look to the opportunities available within our regional communities. Despite the challenge of the present moment, especially for MSMEs, Osman reminds us that we are concurrently surviving and analyzing this situation so that we can prepare and innovate for a future of uncertainty. Now is the time for meaningful and sustainable businesses. This pandemic will be positive for MSMEs in the future, which may be difficult to imagine. However, we must hold on to the belief that “the struggle we are in today is developing the strength we need for tomorrow.”