The Covid-19 pandemic has had a widespread effect on businesses in many ways. Such effects have caused huge layoffs, bankruptcy, and a reduction in the production of the units of goods or services offered. They have also caused an increase in price from suppliers and a change in the way work is done globally.
With this pandemic, comes the opportunity to become innovative and creative. The result of this is the ability to meet market demands and the different unseen variables influencing the business world.
Some Impacts of Covid-19 on Businesses
Huge Layoffs
Start-ups had no constant cash flow as a result of Covid-19. Because of this, there was the need to keep only staff that work directly on the areas of priority. Layoffs then became an option for many companies. Without considering this solution, there would be a backlog in the payment of salaries which will negatively impact the company. These layoffs would also affect the productivity of the limited staff as they had to work longer hours and perform more tasks than before.
Bankruptcy
Organizations that took off with initial investments or loans from financial institutions and could not sustain the repayment terms. The reason was the depletion of working capital and insufficient traction to request for the second tranche of investment. Inevitably, many businesses began going under as their operations came to a grinding halt.
Reduction in the units of production
Consumers as a result of the Covid-19 pandemic focused on just the essentials such as food, healthcare, and education. There has been an increase in the price of foodstuffs and other items. This made consumers begin to cut spending since they didn’t experience any increase in their income. As such, they didn’t purchase the usual quantities of items they used to. Also, businesses had to adjust by adopting “production upon request” only to curb wastages. Another production method was “production in limited quantities.” This was necessary to match the reduction in general consumption because of the increase in price.
Increase in price from suppliers
The supply chain is an important loop that affects all stakeholders. This is because they obtain directly from manufacturers and then sell to retailers before reaching the final consumers. The conditions leading to whatever form of change from the manufacturer go on to affect the supplier’s offering. This, in turn, continues to influence the market till everyone is impacted. Suppliers had to begin to obtain only what can be sold to the wholesalers which came in limited quantity as well.
Thriving In Times of Covid-19 Pandemic
Change is inevitable and only organizations that can adapt to the changing times remain sustainable in business. These are measures to ensure businesses keep running:
Adopt a remote work system
Start-ups have realized that the 5-day workweek is no longer necessary since team members can now work from home. Many organizations now have a hybrid work system where some staff work from home and others on-site. This ensures productivity as teams can now manage themselves without making the top management resort to micromanagement. Tasks such as data entry, phone calls, receipt and reply of emails, online marketing can now be done by a remote team.
Implementation of a cloud-based storage system
The use of cloud-based storage system before now wasn’t easily adopted by a large percentage of businesses. However, as Covid-19 took full sway and human-human interaction became limited, cloud-based storage became necessary. Not just for file stirage but for collaborative work and easy referencing of stored documents.
Focus on Cash-flow
Organizations get into a web of numerous activities that then makes them ignore their core. Inability to focus on their core affects revenue adversely. This loophole was exposed during the covid-19 pandemic. Guaranteed cash flow is the lifeline of every business. Even if it does not make a profit initially, there is a huge possibility of breaking even eventually. The focus should be on every activity that can result in revenue generation directly or indirectly.
Data-Driven Decisions
Companies are trying to curb wastages that could occur in the application of their resources. As such, they pay attention to the data they generate. Embedded in the customer’s data are insights that could lead to how many items are produced weekly, monthly, quarterly, or annually. This is based on the demand analysis gathered from using predictive analytics. Companies use several tools for collecting data for business purposes. The most popular include Google Forms, Google Analytics, and Hubspot. Collected data can now be analyzed using specific tools in data science.
Adoption of Wage Earnings System
The era of weeks of work before earning a salary has also come under challenge. This is because of a rise in the demand for freelancers to perform certain tasks. The advantage is that you don’t have to provide medical care, workspace, and internet services. Companies need to decide on what roles demand a full-time staff and the ones that demand freelancers, consultants, or part-time staff.
Emmanuel Otori, the writer has worked on the GEM Project of the World Bank Bank, Conducted training for entrepreneurs and professionals at the Abuja Enterprise Agency, and has over 8 years of experience working with over 50 SMEs across Nigeria.
Please visit my LinkedIn profile here – https://www.linkedin.com/in/emmanuelotori/