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COMMENT | Michael Jjingo | Should the prudent entrepreneur prepare and position the business for the impact of the corona virus? True, many have speculated about the current corona virus outbreak sparking an economic recession and reversing the gains that the business community has harnessed over time.
The moment is now for small businesses to make fast and decisive adjustments to the changing circumstances.
The pain and uncertainty of the impact of the corona virus on small business owners is staggering and likely to be substantial, warranting a business continuity plan. Entrepreneurs are being forced to take drastic steps to continue operating and many are fearful about their futures.
Tips entrepreneurs should pursue
- Keep planning. Adapt and evolve as this situation unfolds. Position yourselves so you can come back when the crisis is over.
- While avoiding knee jerk reactions into unrelated streams of business, a firm could redefine self through new solutions by doing a new website showing residents how they can shop and eat locally during the coronavirus pandemic.
- Some traders could offer home delivery, trunk-side pickup, Drive in take away and other delivery services; sale of bicycles during the suspension of taxi business, if it were only repairing. You could even digitize your downstream operations by going online, or at worst move to mobile door to door sales.
- As a matter of the security of the business, we know that the “kifeesi” are only waiting for a spark to loot the businesses during this difficult moment. Ensure you have used secure padlocks, while working with the local security detail to support in keeping your office and merchandise secure.
- Let some of your employees work at home, and reduce the working hours. With technology, you can meet your team by Videoconferencing and saving on rent if you are reducing on the utilized space. If you expect production to slow down significantly, it might be a good idea to let employees stay home or work part-time, or you might temporarily close your office. This lessens the risk that those exposed to the virus bring it to your offices and make other employees sick.
- As the small size businesses close or tone down operations, many times, they do not have a buffer to meet their outstanding loan installments or overdrafts, which rises the debt burden. Do you know your relationship manager? If not, ask to have one to support in either rescheduling or refinancing your facility to enable you cope.
- There is need to use the various platforms to negotiate and seek support from government, big corporates and philanthropy organizations that can could come to the rescue of small businesses.
- Uganda revenue authority or even KCCA could flex PAYE and income taxes and tariffs if engaged appropriately.
- Banks’ partners like ABI finance, EIB and EADB are open to arranging low interest loans to enable small businesses recover quickly.
- This is the moment when the force majeure can be invoked for the running contracts with employers of small contractors. Failure to deliver the committed supplies will be acceptable due to the apparent crisis, and will not attract a penalty in reference to the service level agreements.
Practical examples
Joy, an event manager intimates, “ Weddings are cancelled or postponed, but invites were already sent out”.
She is offering help to her customers to ease their stress at the lowest cost possible, send cancellation notices and absorb all cancellation fees from the vendors.
No Stress Bar
Peter, owner of No Stress bar, has emailed his customers and posted a notice on his Facebook and Instagram telling them that following the President’s directive, he’s closing the bar for the next two weeks.
He has kept in touch with his customers. Hang in there, the customers will always remember your relationship management efforts.
Remain ethical
To remain ethical and mindful of the customer, do not over hike the prices. Sadly, your customers might be affected as well. Depending on your supply situation, you may not be able to fulfill orders, or your customers may not be able to buy the quantities ordered or expected. Talk to your suppliers to mitigate the price hikes.
Maria, a food seller
“We have limped along for two days, but as of today we are closing the business for 2 weeks” says Maria, a food seller in the old taxi park. To reduce overheads, plan to reduce some staffs and keep those key employees, even if it means losing more money because you are continuing to pay salaries.
In a nutshell, we should note that in any lock down or crisis, the most affected are the small businesses. It may be wise to offer temporary discounts or more generous terms to make sure your customers do not pump the brakes. But make sure you have your cashflow situation under control.
In all that we do, a customer should be the king, and as such, the customer should be safeguarded. The small business owners should avail water or sanitizers for cleaning hands, but avoid cluttering and congesting their premises.
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Michael Jjingo is a General Manager Commercial Banking at Centenary Bank
