Covid-19 slowdown followed by social distancing and a nationwide lockdown, businesses are facing major consequences. No matter how established the home-based businesses are, they should re-look their business operations and management, including re-visiting their business plan.
The situation is challenging for most businesses to keep their economic wheels turning throughout the lockdown period because of the less revenue churn and the overall uncertainty in the global economic environment.
Unfortunately, the impact on startups or small home-based businesses can be way more brutal as they have limited cash reserves and a smaller margin for managing sudden slumps. This shutdown’s ripple effect will have a crucial impact on India’s economy. All business sectors get affected, resulting in low revenue generation because of an eventual halt on products and services. It is foreseen that India’s growth rate in the financial year 20-21 will be down to 2% from a scale of 4.8%-5.3%.
So, during such testing times, small home-based entrepreneurs should adapt to a new set of rules and be attentive to face the risks and survive the slowdown induced by the impact of COVID19.
What can home-based businesses do to survive and prepare for the growth after the pandemic?
This is the time to understand the seriousness of the situation and convert it into a favorable business condition. The challenge is to navigate the business smoothly in these difficult times. Here are a few tips that will keep you floating during the shutdown:
- Examine the cash flows:
Your cash flow is critical – as long as you have cash flowing, you can keep your business rolling. Therefore, you must guard your cash flow during this economic downfall. Review your company’s policies, stop unnecessary expenditure, identify the areas where cost-cutting is possible, keep a check on the inventory, watch for payments, and prepare cash flow forecasts.
- Apply for an interim:
The RBI has announced a 3-month deferment of EMI payments. But should you use it? Assess your financial condition before making the decision carefully. If you face a cash crisis, talk to your existing lenders, and request a 3-month interim. Though, you need to understand that moratorium does not exclude the interest. The interest on the outstanding amount will continue to grow during the suspension. So, if you can afford to pay the EMIs, don’t suspend them.
- Consider a loan:
If your business does not qualify for government aid or any other kind of relief, consider taking a loan to keep your businesses floating. Approach a bank where you already have an established relationship. The application procedure for the loan is faster and easier. If you cannot get a loan through banks, apply with new-age loaning institutions as their eligibility criteria are more flexible.
- Take your business online:
Taking your business online is advisable in such uncertain times as it will help you keep your business floating. Make the use of technology to increase communication – tools like Slack, Microsoft Teams, and Zoom can support the team to come together, maintain productivity, hold and retain clients.
If you sell products off the shelves in a physical store, consider shifting it to online retail. Investing in a robust online infrastructure is recommended. This will take a while, but it will help you remain in business and grow in the long run.
- Develop social media partnerships:
Now is the best time to make use of social media as a legitimate source of income. Spend in digital partnerships if you want an advantage in business. Form a network on platforms like Instagram and LinkedIn and look for companies whose services/products you can incorporate in your products/service, and vice versa. If possible, swap your ways with these partnerships, an alternative of paying cash.
- Diversify your offering:
Never put all your eggs in one basket. We all have heard it, and it’s entirely true. Take some time to think about what more you can do to minimize your risk and create new revenue streams.
Look for areas where you can launch new initiatives and introduce new products and services. Explore for new possibilities aggressively and re-align your team to make the most of this situation to develop an edge over your competitors.
Watch market trends and see what your customer wants in addition to your standard product/service offering. Diversification can be applied to every single industry.
Is your home-based business ready to hit the storm?
Empoweress (an initiative by the Metropolis group) is taking the lead to encourage entrepreneurs to be prepared for the hindrances without panicking with zeal and zest. Amidst people under quarantine and the economy in recession, we all are likely to see things worsen before they get better. The Empoweress group’s initiative is to help the entrepreneurs plan for rainy days, prepare for the future, hope for the sunshine on the other side, and sail safely.