6 Ways SMEs can protect their Business during the Pandemic
It is the small and medium scale businesses who are facing the wrath of the times that we are in. The pandemic has been an eye-opener for all businesses, especially in SME sector. A look at the World Bank Report on the Covid-19 pandemic says it all. The report, published in November 2020, says that during the pandemic, small and medium scale businesses were the maximum that closed down temporarily. The report highlights that the sector has had shrinking sales while the cash drain happed faster than the bigger firms. When governments eased lockdown rules, SMEs were the first to open their physical offices because of the severe limitations in working remotely. It put the health of their workers and staff at risk. Also, across the globe, it has been observed that SMEs are hesitant to approach banks for loans; they are usually looking for grants.
In March 2020, when the first lockdown and restrictions were announced in the UK, it took just about three weeks for almost 25% of businesses to shut their operations. The US, and other places covered as part of the report, had similar results to announce. Down the line, after months of continued lockdown, most countries faced economic and financial upheavals, with many left unemployed and many financial markets crashing out badly. Unfortunately, though, the impact was way more severe in the SME sector while the bigger businesses managed to sail through safe and steady.
The report mentions how SMEs that have less than 100 employees were the most severely affected. It leaves a massive question mark on what went wrong and what could have been done to prevent such disruptions. When businesses close shops, it hurts not only the employees and the employers but also the entire economy because SMEs are the biggest employers in the under-developed and developing economies. SMEs also are involved largely in innovative work, and therefore, the closure of such firms spell doom for the economy at large.
Covid-19 was just one example of how disruptive things can be for SMEs. Even under normal circumstances, there are innumerable challenges that start-ups and small businesses need to deal with. Some of the common challenges that the smaller businesses need to deal with include – managing finances, the owner’s involvement in every aspect of the business, and the dependency on a single client are some of the afflictions that can be a big botheration to the business.
So, what are the possible ways out? How can you protect your SME business?
- Get professionals onboard
Hiring professionals can indeed mean a drain on your resources – that’s true! While it is unnecessary to have full-time employees around, small business owners can readily settle for third-party service providers. Whether your business is a local retail shop or a workshop, it is important to ensure that your business matters are in the right order. For that sake, you need to have professional, competent, and licensed service providers helping you keep your business in order.
Similarly, appoint a contracted accountant to take care of the finances of the business. The accountant ensures that your business is compliant with the statutory requirements and taxation issues are addressed on time and effectively to save money on the taxes. There are two outright benefits of appointing seasoned professionals as your third-party partners – one; you can focus on your business’s core expertise, and second, be updated with experts managing the non-core part of the business.
- Work hard on preparing an effective strategy for start-ups to get funded
As a start-up company or a small business, getting the right funding is extremely critical. You need to pitch your company to potential investors, be it angel investors or venture capitalists. What is a pitch deck? It is a presentation detailing out everything about the company. The idea is to get the investors interested – so you need to include every possible detail and aspect to make it impactful and persistent.
Different firms approach pitch deck in different ways. It is because small business owners know how difficult it is to get investors interested in a business. So, the objective should be to create a compelling story. It would be best to convince the people to present why the market is worth investing in and impress them with your idea and the product. A professional Transaction Advisory Services provider will help you prepare the right pitch deck and introduce you to the right potential investors.
Such service providers also offer specialized Business Plan services that include creating and writing plans that facilitate the achievement of business objectives. They determine the small business’s financial needs, strategize for growth, and engage with investors like VCs for funding the business, which, therefore, helps to achieve business goals – be it meeting the day-to-day challenges of a small business or staying afloat during the pandemic, or meeting business uncertainties and issues.
- Invest in business insurance
Have your Transaction Advisory service provider advise you on business insurance. Insurance can be your safest bet when the sailing goes tough. Choosing a viable insurance company and policy is of the biggest importance. Also, your TAS will advise you of a proper disaster management plan. When there are unforeseen emergencies like the Covid-19, an insurance or an actionable disaster management strategy can see your through effectually.
Professional liability insurance, workers’ compensation insurance, cyber insurance, key people insurance, business interruption insurance, etc., are examples of a few of the common insurance types that small businesses should consider investing in.
- Protection of your assets and resources
Disaster management should not be viewed as only from the point of a financial recovery plan. Your business should be robust enough to protect itself from emergencies like natural disasters – floods, earthquakes, or human-made disasters like fire, terrorism, etc. It is your business, and as the owner, you need to put money into protecting your valuable resources and assets. Your human resources are your biggest assets, and you need to have a disaster management program in place. You need to invest in fire drills etc., to keep your employees safe and protect them from unwarranted emergencies.
The other part is about safeguarding other assets of the firm. While physical resources need to be insured, there is one critical asset that you must address in the start-up phase itself. That is protecting your business data. With cloud storage, a lot of the issue gets resolved. Choose a resilient cloud service provider so that your critical data stays safe from hackers and other miscreants.
- Look for an opportunity to partner with a bigger business entity
Many progressive, large-scale organizations lookout to partner with small businesses. There are different models, but it also forms a part of their community development program. You and your TAS can work on identifying like-minded organizations and assess the synergic benefits. You can diversify if you do not wish to mix up your core business or product mix.
One big advantage that small business owners get is that they can take advantage of the bigger brand and its name to promote their brand name. It also brings in the sense of respect and credibility to your small business. Ensure that you make the right choice and have proper due diligence conducted by your Transaction Advisory Services provider.
- Use the digital medium
Online medium can take you places that you would have never thought of before. Either through your brand website or social media platform or the help of media channels and their online blogs and posts, you can ensure that your business gets back in the public eye. Have PR releases planned regularly to stay connected to your customers and target audience. You need to have professional marketers, especially digital marketers, to effectively plan your promotional and marketing strategies.
Conclusion
Be it the challenges of the global pandemic or the day-to-day operational issues, small businesses and start-ups need to focus on strategic planning and execution to stay afloat and grow. Remember, the market is competitive, and your challenges of finances, being connected with the market and safeguarding your assets and resources only add to your woes. Take the help of a professional Transaction Advisory Services provider not because it will ensure smooth sailing but because it will help you optimize your business’s true potential and help it grow successfully. A credible TAS service provider associates with the small business from the beginning of a transaction and are there till the end, acting as the support framework. They help the business owner analyze data, ensuring that any decision taken is based on critical thinking and diligent planning.