Each entity under the SME is a part of the vein or artery symbolically that is so essential to keep the country alive. But one virus has flattened all egos of many people and showing we need a small place in isolation and little food and water only.
MSME or small or micro-industry is very important.
So, let me ask you all a question. Are you all entrepreneurs and businessmen? If yes, then what made you start a business or enterprise.
Profit, Status, Generating employment, great idea, family business etc.
How many years have you been micro, mini, small…how many from you became big or mega?
The ONLY aspect which you have all in common is the ability to take the risk, that is why you are an entrepreneur. As an entrepreneur did you shockproof your business. For setting up a business you must comply so many government rules, bank rules, Coastal Regulations, Environmental stipulations. Those of you who started a business and forgot a few basic SHOCK proofing aspects of your business may be finding it difficult to cope up.
So, let us start with a few points:
#How many of you produce goods very essential for the nation?
#How many feel my product now, if not produced is okay, I can start something new. For this, I am ready to tie up with another to help him in capacities to cope up with demand when things improve.
#How many are importing raw materials and now feel that sourcing is gone and Indian raw materials though high priced is good to make my products.
#How many have marketing problems normally and become a bigger issue now
#How many of you are tech-savvy, know how to use Websites, IT processes, etc?
#How many of you have a strong support system through your Auditors, vendors? Like many small enterprises, a lot of business is done on trust and relations built over many years. Today you may have to break bonds to survive- Is it acceptable?
We can write many questions, so coming back to the basic issue, today is like a new beginning and you must start your old business afresh or a NEW business.
What have you done past one week, worrying, talking to friends, helping your family, neighbours? Did you help someone who needed funds -small amount, food, clothing…Human-ness?
Watching the news and being updated on statistics is good – what did you do to lower the statistics. Stay Home. Stay safe.
MSME or small industry contribute huge to pollution- so this time there is a freeze on that, so fresh air and water is more. For every good to happen a lot bad may happen too. To cook good food, a lot of waste happens at the start itself.
This time when you start afresh YOU MUST take control of all processes and shockproof your business. Each of you must be a good recruiter of talent and a good coordinator. Get your supply chain ready now. Talk to vendors for supplies and buyers who will be ready to take your stocks. BE ONLINE too.
Our team is busy trying to cope with various small to large business queries and projects, some which we manage are those not affected by the virus at all. We have our office meeting daily and keep doing work and completing tasks as some of these require the use of brain and technology all the time.
How can we solve an individual’s problem and collectively all your problems?
But for life- it is United we perish, Divided we survive.
Individually it could be counselling, helping de-stress, connecting you with useful resources etc
For helping you all as one UNIT it could be through identifying a common brand. This can be worked out and all in the same category of business shedding your own brands ( unless you are in the leap to make it mega brand) work out a unified strategy for production, and marketing….this requires planning and working it out. Those ready may get together and we can find some good plans to implement.
Shock proofing means- what if my business closes day one, what happens if my staff leaves- replacement, what happens if the government policy changes and I have to shut down, what happens if technology finishes me ( Agfa film rolls example – digital camera -mobile)
What happens if a bigger entity copies my product and becomes successful and I must shut etc?
What if fire, floods, earthquakes, robbery, riots etc occur? Am I insured?
In normal times we say Cooperate, collaborate, coexist and succeed. My mantra is be excellent with a few pillars Clarity- content -style and speed in whatever you do.
Keep an eye for concern of others- all and everything around you.
Your first rupee loss or profit happens only after a time and so invest time and money now in your personality. Be a good person, a charming person yet keep that daringness required for the business.
Let us simulate a few situations. Imagine scientists telling us we can survive only in forests. Or only underwater? What will happen?
We are not ready, but we do have resorts and submarines. One is for pleasure and other for defense, both suddenly cannot become the solution for the human race, we must still figure out quick solutions – that is not easy.
As we enter a new phase, we need to get all our processes correct including having alternatives ready. The time we have now could be put to good use. If you are doing well normally, think how you can do better and those of you struggling, start making choices and select one that is good though difficult to manage. Use all resources now that are available free or in a small fee to enable your business to run efficiently as we see normalcy.
Imagine you are travelling in an express train and suddenly it halted in some remote place and no sight of life almost. The only thing you see outside the window is a road and a bullock cart too in the direction of your destination, a bus that is passing far away towards your destination, a cab that is little away also towards your destination. If the train is going to be halted for six hours let’s say, and your station is just two hours away, what will you do if you have a great emergency to reach your place? Your mind will quickly think of catching the cab or bus right. But if you have luggage and family and all can’t fit in the cab and can’t walk to where the bus can be taken, then you may consider the bullock cart. So, you decide quickly or smartly what is to be done. Correct.? So, in the present scenario how many have kept ready on paper – plans or points to do as soon as situation eases. Anyone?.
So, once again build your entire process and supply chain maps and put it on paper. Start communicating with the RIGHT people from now. Imagine your factory is under maintenance and you will get it running soon.
Those of you who have finished goods, start planning to despatch them. Inform your buyers and alternate customers. If your product has a shelf life get liquidity fast.
Those of you, who have raw materials and can convert to finish goods in a day or two, please do so and get to despatch. Or find another who needs the same raw material and despatch to them so that amongst you no one suffers. Those of you have spare capacities and can help nearby units please see it is done fast. Those of you who know your customers need your products and you don’t have, and you know, who else can supply connect the businesses. The association must form teams to ensure all these points are coordinated out. Key to all this is technology.
Even now pharmacies are open and at the end of the chain money is received and at the other end, the manufacturer of the company can dictate terms for money to be paid even advance.
Think of new opportunities either through the spectrum of man’s life, Age and gender-wise products use at all stages, the materials that these humans are in touch with daily – homes and all products and services associated, health and lifestyle, garments, footwear, automobiles, electronics, kitchen related, hygiene-related etc
See how the travel and tourism industry is affected and what role you can play there.
The entertainment industry is slackening, but with ready movies, producers can sell rights for global online viewing bypassing the going to theatre approach.
Those who are in a one-step reaction to produce products like those making room fresheners -not the spray type but the cake type and food fried and packed, bricks, candles, handkerchiefs, towels, footwear etc could sell better by tying up sales with other products, Especially those units which are next to each other. This will reduce transport issues and if priced well customers will respond well too.
You can see some pattern in locations of smes:
<<Product neighbours
<<Machine neighbours
<<Complement products neighbours
<<Complement Machine neighbours
<<Divergent neighbours
Those running one shift only can use workforce in such a way that one factory runs first shift and another factory close by runs next shift with the same staff till the time your workforce returns. Strategize in such a way all resources are used optimally and best.
Those who have packing machines and feel the same operate with minimal human intervention must support government initiatives in packing food medicines from government-supplied stocks to reach people who need them across the nation.
All the people assembled here and across the SME segments should group themselves and start working on common products One label – manufactured under a slogan BUSINESS CORONA- (Hindi – do it)
The objective is to keep your operations and activity running and ensure the supply chain though weak, starts trotting asap.
Many of the SMEs and companies have labour coming in from a location in the same state or from a different state. The Prime Minister should consider helping these labour forces to discuss with their company owners and put up a unit near their place and deliver raw materials there and get the finished goods distributed from there. This may take a while to set up, but the rewards will be high.
Hotels should open their rooms for long term stay for small team business and specialized skills individuals in a sort of quarantine and help all near that area through phone and video conference. In case, travel eases they can quickly meet their clients etc and sort out issues and help the companies.
Air Travel when restricted gives flights empty space which could be used now for sending cargo. There is going to be huge inventory stockpile and sme having products packed in small packs could be helped by the airline industry. The association head could discuss with the airlines’ industry. High value cargo will benefit more.
Similarly, buses/trucks marked with SME BUSINESS CORONA could be used to shift inventories locked up to distributors/ agents/ consumers safely and in the time of lockdown and any ease out in the near future.
At the earliest opportunity, all units must be run and tested for functioning as with time machines develop snag and rust. Also, the factory premises may be infected with other bacteria and infested with rats and reptiles. Association must ensure all its members’ offices are cleaned with an agent who can do the same during this crisis and many units may have surveillance cameras and owners can watch if this is done in their premises.
So, do all that you can and make LIFE easy. I repeat make it easy though you may say my office and procedures and protocols are long and I believe in quality and must pass through stages. Also, it takes two-three days for a product to be made. For such companies must rely on their competence, financial capability, market response, etc to continue. Yes, do not change just because of a crisis. Work extra shift to reduce a day of work – If operating only one shift a day.
>>Plan what you will do on day one when situation eases
>>Make a new business plan for your existing business and for a new product/service in case you want to change focus
>>Get the supply chain connected vendors and processes ready
>>Find out newer buyers closer to your production site and discuss with your buyers how both of you can help the end consumer
>>Keep in touch with new opportunities and start putting a plan if you think you can do it.
>>Be Internet savvy. Online savvy. Develop a website and use it to inform your customers of any news etc.
>>If you want any help contact your own IT vendors and if you don’t get, then reach out to us.
>>Help your employees out even at the cost of your loss.
>>Discover how you can get liquidity small to large to manage daily and monthly expenses.
>>As I said earlier loans are available – Check SIDBI and other agencies.
>>Keep hospital/ ambulance/ Doctors’ numbers at hand including other agencies like police, Fire brigade, Municipality, power supply etc handy.
>>Appoint a Crisis Manager in your company or form smaller groups and get one to coordinate the crisis. The Association could do that region-wise asap. Not the usual Chapter head. If needed use Retired Army personnel.
>>Ensure you save water, electricity, food and any other item that has implications for the environment.
>>Heed government and other agencies warning all the time
>>Start a home-based business or just as a hobby- horticulture/ tailoring/ food supply/ Tuitions/ connect with children and old- think the welfare of all.
>>Be healthy, be fit. Do exercise and together in families.
>>Help people nearby. Important.
>>Feed the birds and any other animals around that need your attention and help.
>>Do many more things
>>PRAY.
>>This virus is here to stay and like Aids and other diseases till a vaccine or medicine is available we need to be careful.
>>No magic potion available.
>>BUT WE MUST NOT FALL DOWN or NOT BE DEPRESSED. The world is fighting the virus – to help human survive. Give those who fight a helping hand or just silently encourage.
For loans, there are resources available some giving money from 5 lakhs to 50 lakhs under some terms and conditions (and they say Instant!!!?)
We don’t know in this pyramid of uncertainty under the coronavirus what happens to the economy, what happens to consumer spending, what happens to [capital expenditures].”
You are not the only suffering. Let us look at world statistics:
Major disruptions in the most affected countries and mounting concerns in others.
Based on a survey of SMEs in February, reports on China showed that a third of SMEs only had enough cash to cover fixed expenses for a month, with another third running out within two months, putting millions of Chinese SMEs at risk. Report on 14 March, suggests 60% of Chinese SMEs are back in business, but now face further challenges due to reduced demand from other markets.
Also, in various markets companies may start to look for alternate sources.
A February KfW-IFO barometer in Germany on the Mittelstand suggested that so far small businesses in Germany are relatively less affected because of operating in regional supply chains.
While business sentiment among SMEs in February improved by 0.8 points, the business sentiment of larger firms declined by 2.4 points, reflecting the coronavirus situation. However, a new survey by DIHK of over 10 000 German companies (85% of which had less than 200 employees), released on 9 March, indicated that almost half of respondents expected a negative impact on their business in 2020, with almost one third expecting a decline in turnover of more than 10%.8
An early March survey of micro and small firms in Italy showed that 72% of the 6 000 responding firms were directly affected by the situation because of a drop in demand or problems along the supply chain and/or transport and logistics. One-third of respondents estimated a decrease in revenues greater than 15%, and an additional 18% of firms estimated that decrease to be between 5-15%. The most affected firms are those in transport (98.9%) due to the demand downfall, then tourism (89.9%), fashion (79.9%), and agro-food (77.7%).
A survey released on 25 February by Business Finland of 300 companies (80% of which are SMEs) indicated that one-third of respondents anticipated a negative or very negative impact on their business in the short term, with the strongest effect felt because of restrictions to (international) travel of employees. On March 9, the Tokyo Shoko Research published a survey on the effects of the outbreak on firms (174 companies, mostly SMEs). Thirty-nine percent of respondents reported supply chain disruptions and 26% a decrease in orders and sales.
In early March, the Korean Federation of SMEs published a survey of SMEs engaging in import/export. Of the 191 firms surveyed, 71.8% stated they would be affected by the outbreak, with more than half of these firms stating that they were unable to meet delivery dates due to factory closures in China.
A survey of SMEs in Poland, published on 10 March, showed that 30% of SMEs feared a decrease in sales and worker availability in the next three months.13 Over one-third experienced increased costs and reduced sales, with 27.5% of respondents already encountering cash flow problems.
On March 11, the US Institute for Supply Management published their survey results.14 Nearly 70% of respondents, 81% of whom have revenues of less than USD 10 million, reported supply chain disruptions, with more than 80% expecting to experience the impact of the outbreak.
An early March survey in the UK from the Institute of Directors, whose membership is 70% SMEs, underlined the worry. One in five firms ranked the threat to their organisation from the coronavirus as “high” or ‘“severe”. A further 43% said there was a “moderate” threat.15 Another UK survey by the platform Market Finance that came out on 12 March, showed that 69% of SMEs have significant cash flow problems, with more than one-third fearing that without the support they would not last until Easter.
A 13, March 2020 survey from the US National Federation of Independent Business among 300 of its 300,000 members from employers with up to 120 workers showed that 74% of small businesses say they are not yet affected by the pandemic, while 23% say they are being negatively affected.
In China, now they are saying it is normal but what was their report a month back (from an online source)
“Our findings include:
- 80 percent of surveyed firms had not resumed operations at the time of the survey, February 10, 2020, and 40 percent could not determine a timeframe for resumption.
- 20 percent of surveyed firms will be unable to last beyond a month on a cash flow basis, and 64 percent beyond three months, presenting a dire picture for SME bankruptcies under an extended epidemic scenario.
- Barriers to business operations vary along the supply chain, with upstream firms mainly affected by labour shortages, while downstream firms face more serious challenges related to supply chains and consumer demand; and
- Policies aimed at work resumption should consider the characteristics of each industry and avoid a one-size-fits-all approach.
This note is one of two that explore the impact of the coronavirus on SME production in China, drawing on ESIEC survey data and interviews. The second note considers whether SMEs can resume production without compromising epidemic control measures.
Of those indicating they were not affected, nearly half anticipate the outbreak to negatively impact their business if the virus spreads to or within their immediate area over the next three months.
Among the businesses that said they were being damaged, 42% reported seeing slower sales, while 39% were experiencing supply-chain disruptions.17 A Survey in Seattle showed that 60% of small businesses are considering wage cuts and staffing cutbacks, while 35% said they might have to close. “
Furthermore, various media report anecdotic evidence on the impact on SMEs.19 According to the US Main Street Alliance “small businesses are on the front line of the crisis”.
All banks and agencies worldwide are gearing up to fight the virus and the recession it is causing.
YOU ARE NOT ALONE.
You are an entrepreneur. Taking Risk is in your stride.
Today the world focus is on YOU. You may not know it.
Today is the first day of the series of lectures that will help you cope with the situation. As I said Put your plan on paper and start working on it. You have the association team supporting you and our team at MOXIELAN is ready to help you too.
Wish you all the best in commerce, health and life.
Shockproof your business, Flourish your business.
Call +91 7299665052 /+91 8778764684
For Business counselling write to suresh@tenoragroup.com
For any personal counselling write to sureshiyer2001@gmail.com)
((All references to statistics and events regarding the COVID 19 crisis are sourced from online and various websites)
Above excerpts of the speech through a webinar on day 1 for SMEs (across 990 members in Karnataka, more than 50 attended)
(MSME Crisis Management)-Webinar series -12 days
(Theme-Preparing mentally, scientifically, commercially, responsibly to overcome the present crisis, A framework to use across all category business and with different processes)….excerpts of the speech given by Suresh Iyer
