There is no doubt that we are currently passing through the most difficult phase of our lifes and most importantly in our businesses. The big businesses might have strong balance sheet sizes to be able to cope and absorb the great effect of the pandemic. My major concern is the MSME, Start ups and the entrepreneurs that are struggling to cope with the critical issues confronting businesses before COVID 19. What I think that we should be planning right now is our POST COVID 19 STRATEGIES.
Recession is a business cycle contraction when there is a general decline in economic activity. A recession generally occurs when there is a widespread drop in spending and is a period of economic contraction, where businesses see less demand and begin to lose money. In the case of a finance institution, some existing customers might have difficulties to repay their loans thereby creating outstanding debts which could eventually result to bad debts. To cut costs and stem losses, companies begin to lay off workers thereby generating higher levels of unemployment. But for a select group of professionals, a recession may actually be an opportunity to thrive and grow. Adaptation to environmental shocks, including recession, is a capability business leaders have to develop in order to survive.
Post Covid 19 Business Strategies for survival
- Look inward: A quick review of the workforce to manage key channels, build new capabilities and talent effectively.People and talent far outweigh fears of recession. Engage with your people and be open with them. Ensure you motivate and develop high-performers.
- Look for new opportunities: New opportunities in terms of products, ideas, market, technology and innovation do emerge and become the driving forces of economic activity and growth.
- Effective and efficient cost management: This involves cutting operating costs in the areas where there are leakages or the unproductive channel or venture. Engage only in those ventures that will affect your bottom line directly that would give you more money and also divest from non‐core assets.
- Get aggressive with collections. Ensure that debtors figures are reviewed daily and aggressive actions are taken promptly. Being tough with customers may be unpleasant, but it is an important safeguard against the effects of a prolonged economic slowdown.
- Review the internal processes: To eliminate areas of duplication of efforts or responsibilities.
- Review and align your financial portfolio: An experienced and well resourced finance team will deliver on this task.
- Identify unprofitable products and customers for immediate assessment and review.
- Effective performance management and forecasting.
- Evaluate your competitors’ strategies.
- Communicate with all the stakeholders.
- Seek for support services.
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