For Small Business Owners and Entrepreneurs to survive and grow in a crisis is crucial, like in COVID-19. And it will all depend on the preparedness and contingency plans they have. We will have to divide our lives, Businesses, and Families into various facets and individuals. Those who can do this will be able to deal with the situation in better ways than others.
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Cash Flow Management – Key to Business Growth and Survival in Crisis
It would be the most critical element for survival and Growth. Don’t run out of money, as it would be the core fundamental success factor in the current times. Business owners should focus on Cash and cut all non-essential costs possible.
Debt Management should be a major focus of the business. Try to reduce the interest and Debt component when cash inflow is uncertain. This can be achieved through Debt transferred to equity. Reduction in capital expenditure and Better Cash Inflow Management.
Cost should be cut down in systems and processes of business wherever possible. Owners should do the analysis of all cost components and try to reduce costs by 10% in every component. Owners will find that the highest cost component is Manpower for most. But if you rely on layoffs, which is short of them working, it will lead to no growth, and slowly business will collapse in the long run. Owners with their Managers and team should identify various cost components and bring efficiency to them all with a focus on the Power of One improvement at a time.
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Layoff also brings low morale, and businesses should focus more on increasing efficiency. Restructure compensations to performance or ask employees to go on study leaves. And take up advanced professional courses like an MBA. So the same person can return and help in the growth of your business.
When planning to send an employee for advanced courses, it would be a good idea to have a tie-up with the educational institution. So that they can prepare the employee specifically towards your Business challenges. Also, one should choose the Best institutions, like one of the IIMs, MDI Gurgaon, Taxila Jaipur, or XLRI, which have strong Corporate programs.
Decision-Making Process
Businesses will have to improve the decision-making process they have. In emergency and crisis times, businesses that have decentralized decision-making systems do better than centralized decision-making systems. So Business will have to make quick decisions and empower the managers more empowered to make better business decisions.
The dilemma would be to move back to centralized decision-making when things improve, as frequent change is not easy. So Business owners will have to provide leadership roles and give direction to employees towards Success and growth.
Focus on Technology:
A business should focus on digital transformation. Using technology helps owners understand the business's core value in better ways, with the help of new technologies like the Internet of Things, AI, and Big Data analytics. Businesses will be able to make faster and well-informed decisions.
Companies that will focus on adopting new technologies will find new ways to add and increase value to customers. Reduce cost leading to business profits, and have a flexible product change system. This will all help it survive and grow. Now more than ever, Owners and Managers should look for better technologies and invest in R&D, and grow.
Manpower Planning:
This is another important facet for survival and growth in uncertainty. Businesses will have to do proper work analysis of each individual they have and teams, Restructure Compensation towards performance, and improve efficiencies in human resources. This goes to the core concept that Jim Collins talks about in his book Good to Great, on First Who then how “ We should first get the right people on the bus (business), Wrong people off the bus.” Once we have the right people in our business as employees and a team, it’s easy to get them to achieve any goals.
So employee planning will lead to Performance-based which will allow for more flexibility to employees to work from home, Flexible Work time, and more role in decision making and personal growth.
On the employer’s part also employees will need to understand that they will have to accept these events and improve and increase efficiencies, which are better than a layoff. They should, as suggested before, enroll in managerial development programs with Strong Corporate institutions like IIMs, MDI Gurgaon, Taxila Jaipur, XLRI, and a few that have strong Growth and Change management courses along with Business Analytics and a focus on Technology.
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