Managing your SME’s COVID-19 response

By Prince Oguguo & Wande Omidiran

The COVID-19 pandemic is a tragedy that has cost the health and lives of thousands of people around the world. Unfortunately, outbreaks across the globe are projected to get worse in the near future, particularly in Africa which is just beginning to climb the curve. As the need for social distancing, self-isolation and quarantining increases, the small businesses that power our communities will need to brace for impact.

It is nonetheless of critical importance that “mom-and-pop” shops and other local businesses survive and avoid putting the millions of employees that they employ in precarious financial situations.

We spoke with senior executives at SMEs in Europe and the US about their efforts and lessons from trying to keep their businesses afloat and viable during this pandemic. Here are some best practices we identified briefly summarised in five action groups.

Fight the Pandemic

Consider intensifying and increasing the frequency of your sanitization practices. Encourage employees to stay at home if they feel unwell or feel that they have been exposed to the virus. Consider measures to support employees who now have to balance the added pressure of caring for isolated relatives or making arrangements for unprecedented child-care needs due to school closures.

Where possible, offer employees the option of working from home in general, or having staggered work hours to reduce crowding at the workplace. Replace face-to-face meetings with conference calls or emails as much as possible.

Look towards digital

Depending on the nature of the lockdown in your region, and the nature of your business, you may be able to keep providing services to your customers. Now is a good time to consider investing in or updating your website with information and tools to take orders.

Square Space and Wix are among numerous online tools that can get you started in minutes with no coding experience needed. If your business sells tangible, standardized products, other options include creating a website powered by Shopify or signing up on bigger e-commerce marketplace such as Jumia or Etsy.

Well-known e-marketplaces already have the infrastructure for payment processing and cybersecurity, and eliminate the stress of setting up research and development. Consult their websites and talk to other entrepreneurs in your region to identify what would work best for you.

Businesses that provide consultative services such as legal services, family medicine, teaching, therapy and training can also choose to provide virtual consultations to clients using free video applications like Skype, WhatsApp, or Facetime.

Customers may end up cash poor as stockpiles at home empty out and cash machines go unreplenished. Now is the time to ensure that your business can receive payments by other means. Particularly favour cardless payments thus limiting the spread of the virus through cards and PoS devices. Set up peer-to-peer or online payment methods to continue to receive payments during the shutdown.

Communicate, communicate, communicate

As uncertainty rises, customers need to know that you are open for business, if you are, or closed if you aren’t. If your business is temporarily closing, communicate the expected re-opening date and updates to customers through the company website, digital adverts, text messages or e-newsletters – ideally some combination of these. If you’re only physically shutting down premises, but will be available online or via phone calls, communicate this too. Also, communicate steps that you are taking to minimize the possibility of transmitting the virus through your premises. This helps reassure customers that you care about their wellbeing and that of your staff.

Furthermore, consider establishing a crisis committee that you are part of as CEO, and that communicates with your employees at least daily. Assure them that you’re not taking the situation lightly and that you are considering all options to protect them and their livelihoods.

Get liquidity

Even if it seems distant now, anticipate that the pandemic might shut down economic activity in your region. Seek out enough liquidity to keep the business going through a shutdown lasting a few months. This should allow you to continue to pay employees, rent, utilities and other ongoing costs. Cut non-critical costs, bonuses, and consider incentivizing customers to pay upfront.

Depending on the nature of your offerings and services, strategic considerations will need to be made regarding promotions. Perishability and expiration of trade materials or products need to be considered for non-essential service and product offerings. Yet for a company with high liquidity, panicked promotions might cost revenue and deprive the firm of the stock needed to swiftly resume business once the epidemic recedes.

If you have insurance for your business, contact your insurance provider to see if you’re covered for business interruptions. Also, check to see if your government has developed programmes to support small businesses during this time. Many governments in Europe and the US have initiated programmes to support small businesses with rent payments, taxes etc. Although circumstances are different in Africa, your government may have such programmes too.

Practice makes perfect

As ideal as any strategy may seem, the reality may pose unpredictable challenges. It is best to transition gradually and smoothly to enable the business to make room for adjustments and to hedge against other unforeseen developments. Work from home and other digital transitions efforts should be tested over a period of time if possible, to allow for customizations necessary for your business and to ensure that your business is fully equipped with the necessary infrastructure to enable smooth running over time. For example, when companies transition to working from home, they often find that critical documents or tools to function had been left at work by employees. Even if your city does not look like it will get locked down, start practising now.

Have a controlled trial run for every major change that you make to your business before committing to it. Business leaders that felt the most confident about their strategies, tended to be those who had first tried them out, to determine and discard options that didn’t work in their unique case, while retaining options that worked.

Like all global recessions before, this current one caused by the COVID-19 pandemic will leave a permanent mark on the economic landscape by forcing many businesses into bankruptcy and by creating unprecedented opportunities for others. It is our hope that some of these action groups provide some basics and help you and everyone who depends on your business avoid financial precarity during these extraordinary times, and come out on the other side stronger than ever.