5 tips to help startups and SMEs navigate the COVID-19 pandemic

While the current pandemic has been a major challenge for businesses at large, it’s been especially tough for startups and SMEs. Keeping up with shrinking revenues and rapidly changing operational restrictions, these small firms need all the help they can get.

Speakers from “Unlocking the Lockdown: Startup and SME Challenges and Opportunities Amid the Pandemic”, a webinar held last April 17 organized by regtech startup UNAWA, share some tips on navigating through these difficulties—and hopefully also unearthing new opportunities in the process.

1. It’s time to face the music—or rather, the numbers.

With revenues of many startups and SMEs greatly affected since the lockdown, it may not be so palatable to look at one’s books. But for Reese Fernandez-Ruiz, president and co-founder of fashion social enterprise Rags2Riches (R2R), it must be done or it could make things worse in the long term.

One measure is to conduct daily cash flow planning and management. “Every time something goes in and out, check it. I created this Google Sheet that I track every single day and have a list of all the payables and receivables.”

It’s also important to check how far your runway is. “What I do is stretch it out up to two months, so that I have a two-month [window] at any given point in time. It’s stressful because you can see, ‘At this time, if nothing comes in, I’m in a bad place.’ But you have to know it so that you can find ways to stop it.”

2. Listen to your customers.

Unusual times create unusual situations, and therefore, unusual consumer needs. As a startup or SME, this is your chance to help address them.

Rommel Ng, president and co-founder of Buffalo Wings N’ Things, cited an example from the restaurant industry. “Aside from disposing of the inventory, the reason the big [restaurant] players are starting to sell ready-to-cook [products] is because people are confined in their homes, and it’s cheaper if they cook it.

“What drives our businesses now is what the customers need…We’re so blessed now because… [consumer] behaviors are being broadcasted by people. You’ll get a clue, and you have to adjust.”

3. Think of the future.

With the current situation making the present already so difficult as it is, it may be easy to raise one’s eyebrows on this piece of advice. But the actions of now determine the results in the future.

“You can’t pivot anymore ‘after this’, ‘when things go back to normal’, ‘when this is all over’. All of those sentences don’t apply because you have to think about the things that you can do now,” said Fernandez-Ruiz.

“If you do have cash, go on the offense also… investing in a little bit of R&D, designing things for use in the future. And by ‘future’, I mean the next two weeks, because that’s what the future is during these times.”

4. Always put your people first.

The pandemic and consequent lockdown have inflicted different kinds of stress on employees. Now more than ever, it’s vital to be there for them. “We prioritize people: taking care of their physical health, financial needs, and also their mental health, with the latter often being overlooked,”

This, of course, should also reflect on your cash allocations—even if it may mean making sacrifices. “Our team knows that I’d be the first not to get paid my salary before everybody else,” said Fernandez-Ruiz. “When your people understand that, the trust is being built. You don’t build trust during the good times; you build the trust during these times.”

5. Go beyond your business.

It’s also just as important to make your presence felt outside in the community. If you don’t have a lot to contribute materially as a small enterprise, there are other ways to help.

“We don’t have a lot of money. But I can contribute experience, knowledge, and insight,” said Ng. “It’s an opportunity to get intimate with people, the community, and all the stakeholders: the customers, your employees, and your investors.”

For Fernandez-Ruiz, it’s also about making a stand. “It’s very important to show your values right now… It’s easy to live our values when times are easy. But living your values during the crisis, it’s actually when values are most critical and most needed.”