COVID-19 is here, and before it wanes, it is poised to take one or two businesses. RAHEEMAH AROGUNDADE writes on some ways businesses can remain afloat during and after the wave
The pandemic, its impact
The coronavirus disease, codenamed COVID-19, has been wreaking havoc across the world, disrupting economies and businesses, so much that the world economy is receding. With this major down in economic activities, businesses, especially start-ups, are struggling to stay afloat.
Compulsory social distance and lockdowns are among the new attitudes the outbreak has forced on humanity, especially those living in high-risk areas. The ripple effect of movement restrictions and disruption of normal life are detrimental to business growth. Even large companies have had to lay off staff members and ask others to work from home, as a direct effect of the economic shutdown and, more importantly, as a means to control the spread of COVID-19.
The reality is that start-ups and small businesses do not usually go under due to lack of viable ideas. In fact, owners of start-ups and Small And Medium-sized Enterprises have imprints of novelty and ingenuity around their businesses. What kills small businesses is majorly lack of profits and inability to boost sales, which lead to a decrease or complete halt of cash inflow. Depending on the severity, some businesses can recover while others may end abruptly.
Most owners of start-ups and SMEs agree that the outbreak has negatively impacted their businesses; from halting cash inflow, reducing consumer and staff strength, decreasing demand and supply of goods and services to general obstruction of business activities.
Creative Director of Flicks Photography, Sylvester Akinboye, said, “The pandemic has affected a lot of start-ups negatively, and it hasn’t been easy. But the ability to see positivity in this kind of period is key and golden.
“The pandemic has affected all types of businesses, including the large-scale and start-ups. But it has more devastating effect on start-ups, as large-scale businesses often have well-structured schemes and continuity plans in case of emergencies.”
According to the Abuja-based visual artist, the system is often viable and systematic for the large-scale, as most of the workers can work from home.
He added, “This is very different and difficult for start-ups, and it could however crash their businesses if it lasts longer than expected. Many start-ups are already spending their business capitals on daily needs. So, when one spends and doesn’t earn, the money gets exhausted.
“As a photographer, it is very difficult to get gigs, as social gatherings are prohibited. We are not getting new job offers. Most jobs already scheduled for this period attract re-negotiation. Some have even cancelled their events and, because of that, we have to refund deposits.
“As a start-up director, I feel this is a period to re-strategise, unlearn and re-learn.”
The Director, Elusade Opeyemi, corroborated Akinboye, emphasised that the outbreak had taken a toll on business continuity, especially for start-ups.
“As a pandemic, the social and economic effect of COVID-19 cannot be over-emphasised. It has greatly impeded business growth and development. In my opinion, SMEs have been one of the largest employers of labour, both skilled and unskilled.
“Any situation that affects start-ups and SMEs affects the society at large and this, in effect, affects the productive chain. So far, the productive chain of the society has been cut short; as a result, many people are now unemployed as a consequence of the lockdown.”
The mobile banking agent said that developing countries like Nigeria, which had no continuity plan for SMEs, would likely crash and suffer huge downfall in Gross Domestic Product.
“This will even be more difficult for SMEs that have acquired loans from financial institutions, because product or service will be pending and the working capital might be diverted to other financial obligations or personal responsibilities during the lockdown.
“It is likely that even after the pandemic, the capital will not be available to kick-start the business,” he added.
In line with the thoughts expressed above, the Creative Director of Aso-oke by Olufunmy, Funmilayo Adesina, told Africana Entrepreneur, “The pandemic has dealt a huge blow on some SMEs, as against the large-scale businesses.
“As an aso-oke vendor, clients whose events had been previously scheduled for specific dates had to cancel their orders for aso-oke because of the pandemic. This will go a long way in obstructing business activities.”
The Deputy Chief Executive Officer of Swallas Kitchen, Imo Immaculata, lamented the negative effect of the pandemic on SMEs such as hers.
“Start-ups and SMEs are still struggling to make profits. I co-run a restaurant, which is just a start-up, and the outbreak has greatly reduced our customer base, as most people are either indoors or prefer to cook their food themselves to ensure that it is not contaminated,” she explained.
As a result of COVID-19, businesses have either paused or stopped completely due to paucity of sales. Start-ups and SMEs are directly at the receiving end of the outbreak. Most business owners with the zeal to continue find ways to mitigate the effect of the outbreak on their businesses. This is relatively easier for large companies.
“To help cushion the effect of the pandemic, some SMEs that can afford to do so are utilising the social media to ensure that their business are still running. However, without prior planning, this may be difficult to achieve,” Imo told our reporter.
…Opportunity to develop
Akinboye suggested that budding CEOs should invest their time in learning more about managing and ensuring business continuity, especially using the internet, in preparedness for the unforeseen.
He advised business owners, “Keep developing their skills in business and learn from larger companies. Even if business activities have been impeded, this period can be effectively put to use by creating a stronger online presence, thereby increasing online customer base. At the end of the day, these will be highly beneficial for businesses.
“The pandemic could last longer than expected, so it is also a good time for self-development. Start-ups and SMEs should maximise the opportunities provided by technology. For instance, we are holding highly discounted mobile graphics design training for individuals as well as businesses. We are thus utilising the opportunities provided by technology and encouraging others to also make use of such opportunities for their businesses,” he said.
Adesina agreed that the major ways through which SMEs had been surviving the hard times was by increasing their online presence, especially through advertisements on social media.
She suggested that business owners should “improve their skills through online classes and consistently check up on their clients.”
Yetunde Busari, a real estate consultant, also acknowledged the role of social media during these times.
According to her, the way forward is to keep creating a stronger online presence, as the target audience is usually online.
“There is also need to re-strategise their business management and operations approach for continuity of business,” she said.
Undoubtedly, this period is very difficult for owners of SMEs, and they will have to utilise emerging trends in digitisation, if their businesses are to survive or bounce back after the wave.
The government of Nigeria has also implemented policies that would help to cushion the effect of the pandemic on SMEs, especially those on loans.