By Sharina Ahmad
REOPENING businesses after the Covid-19 pandemic will be more challenging than shutting them down as it will never get back to normal, at least not in the immediate term.
While there is a sense of trepidation and hope in resuming business operations, the main concern is whether businesses can resume operations with scarce resources, especially in terms of cash.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid opined that both reopening and shutting are equally hard.
“After you close down, you need to think about what to do next. Not to mention dealing with the emotional state, especially when you have had a few employees with you before.
“Whatever it is, the decision has to be commercially driven. Like stock market trading, you have to know when to cut your losses. Similar principles can be applied for business,” he told FocusM.
Prior to this, Afzanizam said, the period of the movement control order (MCO) and the number of the Covid-19 cases have to be the main indicator on when businesses can begin to resume.
“However, we could see the government gradually opening up the economy. This is in tandem with the decline in the number of active cases of Covid-19.
“Other jurisdictions too have seen their economy being reopened. New Zealand has openly said it has successfully beaten the virus spread. So this is good news. Therefore, businesses need to be patient before the economy starts to pick up its pace,” he added.
Moving forward, Afzanizam said businesses might consider changing their business landscape due to digitalisation, consumer taste and the urgency to contend with rising business costs, intense competition and the regulatory environment.
“Businesses need to be savvy about their market and they must have the stamina to endure these challenges. Seeking knowledge and having the right people in their organisation would really help their business to prosper. There is no one size fits all solution,” he added.
Institute for Democracy and Economic Affairs (IDEAS) economics and business research manager Lau Zheng Zhou noted that businesses are built gradually.
“Rome wasn’t built in a day. It is understood that business owners have invested a lot, including emotionally, in building their businesses from scratch to where they are today.
“Relationships with suppliers, vendors and customers also require a very long time to build, not mentioning the lessons learned in running the business successfully along the way. But if businesses cannot respond to changing demand, then the market forces will eventually compel these businesses to exit,” he told FocusM.
He questioned whether the business owners have a plan which enables them to better respond to the changing market environment post-Covid-19. “There is a cost to sustaining funding and the operations, and resources could be better utilised elsewhere if the business owners are not able to have clarity on the future returns on investment.”
According to Lau, businesses must be comfortable in being able to respond more regularly to drastic disruptions in consumer behaviour, internal organisation and with regulators.
“It is crucial that businesses focus on core activities and outsource or reduce non-core activities. That is key so that businesses are always ahead of the curve rather than spending too much time building internal capacity,” he said.
Lau stressed that businesses must now compete more rigorously on the e-commerce platform as competition will likely shift from cost structure and distribution to predicting consumer behaviour for the quality shopping experience.
“Due to the human restriction movement, businesses might also compete for talents as companies become accustomed to employees working from home,” he added. – April 30, 2020
