The current burst of COVID-19 has produced socio-economic impacts. This resulted in a global economic deceleration largely affecting SMEs. Many SMEs worldwide are forced out of business and many are on the way. The pandemic impacted Sweden’s small and medium enterprises in the same way.
For the survival of SMEs, these necessary steps can help. This blog provides insights and guidance to SMEs on how to address the problems that rose with COVID.
The situation that arose in Sweden after the virus hit the world would stay volatile even after the world recovers from it. SMEs would still take a lot of time to navigate this economic shock. They would have to move in two phases. The first phase will deal with how to make up for all the damage that the virus caused; rebuilding and reshaping. The second phase will deal with how to grow the business, post COVID.
Rebuild
As the virus struck, it disrupted the professional as well as the personal lives of many. The limitation of the damage became the primary concern which also caused uncertainty when the lockdown occurred. This caused major layoffs and resource cut-offs.
The rebuilding phase starts with an entire assessment of what was lost.
Damage assessment
You can’t start building your business back straight away. Before you do that, you have to see what and how much damage was caused due to the crisis. This assessment obviously starts with numbers. You have to calculate your sales, profits, and cash flow. You need to gain an understanding and start to research how badly your business was impacted.
However, the damage to any business is not always about financial numbers. Sometimes it goes way beyond this.
While assessing the losses, you will have to consider how many leads you were generating, how many employees you had to let go and even the resources you had to cut short due to the outbreak.
You also have to account for the customers that were driven away or reverted due to the crisis. Combining all the factors mentioned will give a complete assessment of the damages you bore due to COVID-19.
Cost optimization
Cost optimization is not cost-cutting. Cost-cutting is a short-term tactic that doesn’t go a long way. Rather than going for this, go for strategic costing. This means you have to realize what drives your business towards profits and what are the necessary elements that take part in the process.
This will give you an insight on cost opportunities and you will be able to make the right decisions.
Perform a spend analysis to measure and track success. This will help you find the right cost opportunities and will help you invest in the right matter. Industry trends and functional experts can add a great deal to improve the situation.
Capital assessment
Sweden SMEs are being highly affected by the additional shocks of COVID. This is putting further pressure on the operations. SMEs especially don’t have loads of capital available. Businesses need access to the capitals and a complete summary of the capitals is required in order to calculate it.
To get your hands on the capital, you can go for the profits you derived from the business. Since COVID struck, there’s a high possibility that the profits are depleted. You’d have to seek other options to acquire the capital for it.
Sweden’s federal support programs can be helpful in the case. Federal programs in Sweden are providing low-interest federal disaster loans to small businesses.
These loans can be used to pay debts as well as bills that can’t be paid due to COVID-19. The repayment period for these loans is long and goes up to a maximum of 30 years. These loans are however provided on a case-by-case basis.
There are certainly other methods to acquire support too. There are contemporary financing options and there’s the option of some small-term business loans from banks as well. Business credit cards could work too but we will warn you about the interest rate that they might provide.
The reaction of SMEs in this situation directly affects the recovery phase. As the fatigue of the crisis will pass, the sentiment of the consumer will also change. The customers will start investing confidence in the business. This will make the SMEs turn to the next phase of business that is Regrowth.
Regrowth
Even after the crisis, there’ll be a number of shifts that will remain central. Behaviors learned during the crisis will become new normal. The growth of the business will not depend on old strategies.
In order to grow your business, there are certain things that you’ll need to work on.
Confident workforce
Employee retention comes way before customer retention for the business to prosper. Getting the confidence back in your workforce can be a little challenging post-lockdown. The team is going to be insecure about the future in case a similar thing happens.
You have to ensure the team that you are taking the right steps to maintain the company and the work. You have to show compassion and empathy towards them. Have transparent conversations and let them know that you’re in it with them.
Make the team realize their
Purpose: their contribution towards the business and how important they are for the enterprise.
Potential: What they can achieve while being in the team and what they can do with that potential for the company
Perspective: Make them realize how they can help in avoiding similar situations in the future.
Enabling technology
This crisis has opened the eyes of many SME and even large enterprise owners. The technological gaps are highlighted by COVID-19 and should be an important aspect to think of. Start thinking more strategically about technology and make your workplace digitally paced.
You have to leverage the most advanced technologies to your advantage as they’re cost-effective as well as time-saving. You have to consider all the opportunities that deliver results. It includes business value, customer experience, and employee satisfaction.
Certain technologies that can be helpful in keeping you relatable are
- Cloud: Use cloud services to save and secure all the data and records.
- Networking: Moving towards better networking options will make you stay connected with your customer base.
- Cybersecurity: Volumes of data became vulnerable during the crisis and many cybercrime reports were received. Make your data secure by the implementation of cybersecurity practices.
- Automation: Go for the automation of processes and repurpose your workforce towards important tasks.
Modifying business model
Ever since the disaster occurred, companies are making faster decisions. To stay in the race, SMEs will need to rethink their strategies as well as their business models. The shift due to COVID-19 has been too big.
Industries have changed drastically and new trends are set. Business remodeling will help turn the businesses according to the trends. New key areas to focus on are going to be customers and workforce.
SMEs have to strategize according to the customer behaviors and you have to do it now. Keeping the competitors and their strategies in mind, they have to build their own model.
Make the structural changes that go towards the next normal. Remote work is the most important factor that is to be considered while remodeling. The mental and physical well-being of the employees has to be prioritized in order to increase productivity.
When you reconsider the business model, ask yourself the following questions
- What is going to be the need of the customer post-COVID?
- What are the employees going to require post-COVID?
- How will your competitors behave post-COVID?
- How will the market behave post-COVID?
- How can you optimize supply chain processes post-COVID?
- How can you rationalize your products and services?
Progress tracking
You have done everything in your hands to work your business from the ground up. But you do realize that you have to set realistic goals for your company.
You and your workforce have to avoid wishful thinking when planning the whole process and even when you’re tracking the progress. To keep a track of the progress, you have to set milestones for the company. These milestones are to be set from the initial stage. These progress indicators are not only for the employees.
They should also indicate how the company is performing overall, how your marketing strategies are working and also how your new business model is behaving.
You have to implement a feedback strategy and track early warning signs. These will help you indicate the problem coming from afar.
The regrowth period requires calibration of both short-term goals, long-term goals and paths leading the way. Norgic believes implementing a more thoughtful strategy by keeping each aspect in mind will not only let you recover from this crisis but will also help you emerge as a successor in the future.
We are a leading technology solutions company that believes in you. Our startup equity services not only helps the startups but also the SMEs. Our services and strategies can help businesses grow and expand.
Want to know how? Contact us today and learn why we are so good at it. hello@norgic.com
