Keeping your head above water during a pandemic

By Brian Soo


WITH the ongoing pandemic and the resulting economic crisis, small businesses are facing challenges just to stay afloat. As business owners continue to do everything possible to generate revenue and keep the business running, it is more important than ever to assess and optimise your business.

Here are five ways to pivot your business and help you weather this economic downturn.

1. The best time to digitalise your business

A lot of businesses have held back on digitalising their business due to the inconvenience that comes with any sort of transformation. This shift towards digitalisation has proven not only effective but essential to businesses these days to stay relevant.

When things are digital and goes into the cloud where it is readily accessible, there is little need to be physically at a location to get data. With the Government pushing for more work from home orders, this will be essential to maintain an efficient workflow.

These days, there are lots of ‘freemium’ office software where SMEs can take advantage of it. Most of these services even have discounted plans for companies struggling during the pandemic.

2. Have a 24/7 business model

A lot of brick and mortar businesses are affected by this pandemic. Mostly due to the restricted movement of customers. Thus, people are spending their time online and most importantly, spending their money online.

While most traditional businesses think that it is difficult or impossible to move their products and services online, it actually is not.

Our fire safety business has been offline for the past 40 years but about two years ago, we have fully focused on bringing it online. We were surprised to see customers purchasing fire extinguishers at the wee hours in the morning and even late at night.

By bringing your business online, you are not limited to office open hours anymore as your store is now accessible 24/7.

There are plenty of resources on starting an online store. Depending on the resources available within your company, it can be done in-house or outsourced.

E-commerce platforms these days make it very easy to set up online stores, even for the older generation business owners.

3. Reevaluating your business model

Some businesses are fixated on their products and services, without wanting to ever change anything. This is the main reason why smaller, more nimble companies are able to survive this pandemic.

With less of a ‘core’ to uphold, they are able to change and tweak their business models. While it may be difficult for some larger businesses to do so, there is still a solution.

Businesses can package their products towards a more B2C focus. As for our business, fire extinguishers are mainly seen as a regulatory product, where one needs to purchase it rather than wanting to purchase it.

We have managed to change this mindset by running social media ads and campaigns to showcase the use of cases of fire extinguishers in homes and vehicles.

By doing that, we have managed to sell tens of thousands of fire extinguishers to homes and families on our website.

4. Reassess your business’ finances

If you have implemented some of the suggestions above, your company’s financials would definitely have changed. You should now work out a cash flow budget for the coming one to two quarters and assess your business’ financial position.

Knowing the length of this projected runway is crucial to ensure you are able to meet any financial commitments your business may have, such as purchase agreements for company vehicles.

Missed payments will affect your business’ credit report, leaving a negative mark on CCRIS, the country’s central credit information database that banks and financial institutions refer to when you apply for a financial product.

Just as it is with individual credit reports, inconsistent repayment of your business’ credit facilities will result in poor credit health and a low company credit score – and ultimately, reflect poorly on your business as a customer to the banks. In turn, this reduces your business’ chances of future financing applications being approved.

If you find your runway to be dangerously short, the next step will be essential for your business:

5. Find out what assistance is available to you

In these challenging times, the Government and the banking industry have many forms of assistance available for businesses. The Government’s SME-focused Penjana economic stimulus package offers various industry-specific financing options that businesses can tap into at a fixed subsidised rate.

For example, there are financing options specifically for SMEs (Penjana SME Financing) as well as for micro-SMEs (PENJANA Microfinancing Fund). In total, the Government has allocated RM35 bil in the Penjana economic stimulus package.

Following the tabling of Budget 2021 recently, microenterprises with original facility financing of up to RM150,000 are eligible for the Enhanced Targeted Repayment Assistance Programme, with options of a deferment of repayment for three months or a 50% reduction in monthly repayments for six months.

Meanwhile, the banking industry remains prepared and ready to assist SME customers affected by COVID-19. Repayment assistance is still available for application if you believe your business may need a helping hand in the coming months.

Your bank may offer new financing terms with lower monthly repayments spread over a longer tenure, allowing you to breathe easier with additional cash freed up and ease cash flow issues.

Business owners should also note that taking any repayment assistance during this period will not be recorded on CCRIS, and thus will not negatively affect your business’ credit health.

What’s next?

If your business is financially affected by COVID-19, speak to your bank now about repayment assistance that is available to your business. During this period, banks stand ready to assist you in resuming your financing repayments.

This is important also for the economy, as the banking industry will be impacted if too many borrowers cannot resume repayments.

Note that SME customers may be offered repayment assistance. While the banking industry has contributed significantly to businesses and individuals alike during the six-month blanket moratorium, the gradual recovery of the economy also depends on assisting the SME industry.

As a testament to the banking industry’s commitment, Bank Negara Malaysia recently revealed that as of Oct 9, about 640,000 applications for repayment assistance has been received, with an approval rate of 98%.

Banks are also going the extra mile by contacting customers to find out if their customers require financial assistance during this time.

Speak to your bank and discuss your available options

While the economy gradually recovers, this continues to be a critical period for all businesses. This also means it is more important now than ever to take charge of your business’ financial health and seek assistance where needed on an urgent basis.

Regardless of whether you are an SME or micro-SME owner, your bank is ready to assist. Speak to your bank as soon as you can and do not delay to sort out your financial obligations. – Nov 21, 2020


Brian Soo is the chief innovation officer of Fire Fighter Industry Sdn Bhd.

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