The Covid-19 pandemic has been a mixed bag of fortunes for many small businesses. Some have thrived while others have been dealt a heavy blow to the point of closure.
Either way, any change - negative or positive - is the way of life and business.
The Covid-19 pandemic has offered a wake-up call and the way of doing business will never be the same again.
Enterprise explores how businesses can chart a post-pandemic recovery and thrive in the “new normal.”
Refresher course on business management
Maisha Microfinance Bank Head of Business Development Michael Muriithi believes that some businesses are at a stage where bouncing back means entrepreneurs and leaders returning to the basics of business management.
“I have been interacting with small businesses for close to fifteen years now in banking and seen many grow. This brings the point of record keeping. That’s how businesses grow. When they sell at the end of the day, they need to account for it as a small business,” says Muriithi.
“Customer retention strategies should also be taken into account. As an entrepreneur, I may want to know where is so and so right after the first purchase. Because I might be losing them to the competition.”
He says even product diversification can go a long way in changing the fortunes of some struggling businesses in the face of the current pandemic.
“There is the other element of saving and banking for some. I mean the business owners need to find somewhere they can save a portion of their income for a rainy day.”
No silver bullet
Frida Owinga, the founder of Passion Profit that has helped entrepreneurs build thriving businesses for over a decade, explains that there’s no quick fix or silver bullet for charting a post-pandemic recovery. It’s a journey instead, she insists.
Ms Owinga thinks that businesses should embark on their recovery journey by first taking a fresh look at the value proposition in order to gauge a firm’s market relevance.
“Things have changed. So the whole value proposition may not be relevant. The next thing they need to do is to make sure they have a profit formula. Having a profit formula is making sure that the problem you are solving makes people willing and able to pay for it. If not they risk going broke.”
Ms Owinga further believes that any hard-hit businesses out there can get out of the doldrums by finding and joining a good support system.
“They should not walk alone. There is a lot of help out there. In fact, there are many networks and associations that can give them money, markets and mentorship.”
Standard Investment Bank Head of Research Eric Musau echoes the same sentiments. He says that it’s crucial to upskill and create an enabling business environment to remain competitive.
“There is no silver bullet to address the issue, but generally, we need to consider how to upskill our population and create an enabling environment to make our products and services competitive in the global marketplace of ideas and innovations,” advised Musau.
Professor Bitange Ndemo, who lectures entrepreneurship at the University of Nairobi, in a recent presentation noted that, among other things, thanks to the pandemic, the rules of success have radically changed and are ever more reliant on harnessing the power of digital models to create new value and experience.
“Covid-19 has forced the world to reset and accelerate to live differently – to learn, work, socialise, shop, worship and collaborate in different ways. This is, therefore, our watershed moment for the digital transformation of business notably by creating new business and revenue models,” noted Ndemo in the presentation titled Disruption and Thriving in it.
Musau added that small businesses needed to adapt to the changes that the pandemic had wrought and especially entrench technology.
“Small businesses are as diverse as you can imagine in an economy - entrepreneurs need to look at the changes that the pandemic has brought upon them specifically and adapt appropriately, especially with regards to looking at technology and e-commerce distribution models.”
“It is perfectly possible that some businesses have thrived or been created during the last two years while others struggle or close,” said Musau.
Keeping the costs low
Other experts in the market have also volunteered a myriad of solutions where the key ones they talk about come down to some businesses keeping costs low through even leaving their staff working remotely. Others believe given it may be difficult to hire extra staff with their meagre resources, a prudent approach for some businesses would just be to up-skill their current staff.
Some businesses may also have to resort to looking to the government and other organizations for relevant aid.
Global think-tank Deloitte recommends that some businesses will have to find means to get their cash flow in order. This means that an assessment of the business’ level of liquidity and planning on managing the cash flow moving forward.
The process, according to Deloitte, will commit some business owners contacting their bank or finance provider about increasing their facility limits or obtaining loan repayment holidays.
Understand customer needs
Other aspects that businesses will have to consider will be how to work on understanding their customer needs. This begins by capturing and managing their expectations, preferences as well as consumption patterns and seeing how best to satisfy them.
Some businesses could also pursue the alternative of re-orgainising their supply chains accordingly by doing an assessment that leads to a better understating of issues such as the products and services they will need from their suppliers to restart their operations, what additional suppliers they will need or dispense with.
“Policymakers can assist small businesses by helping them tap into suitable supply chains (government and large businesses), which would help them scale. Sustainability remains critical as majority of Small and Medium Enterprises (SMEs) close within a few years of setting up for a variety of reasons - even when you exclude the impact of the Covid-19 pandemic.”
According to Deloitte, it may be a better time for some businesses to rethink their workforce and that this involves finding out what workforce is critical to restarting and how actually the business can support them to adjust to the “new normal.”