These are unprecedented times which no one has witnessed in their lifetimes.
Presently the lockdown is for 21 days, our primary target is to keep ourselves and our family safe. We have to minimize the spread of this virus
All this is coming at a huge economic cost, which the nation and the world are bearing right now. Of course, there will be tremendous issues once the lockdown is lifted. All are hoping that the government will listen to their appeals and provide relief. However, the best way out of this situation is to help oneself.
There will be many problems and challenges along the way like cancellations of orders, piling up of inventories, late payments, bad debts, and Bank defaults are some of the challenges that most of us will have to face.
What is the way out? What role should we as a businessman or an entrepreneur play? How should our intimate apparel members mitigate this crisis?
Well we have prepared 20 pointers on how to cope with the LOCKDOWN and its AFTERMATH!!
1. Clear Communication: In times of stress and crises it is said that it brings the best of our character, so as leaders of your organisation, please. be clear-headed in your thinking, form your strategy by consulting as many people in your organisation, your vendors and your customers. Try to gain insights into which way the water is flowing. Try to gain as much information as you can from various sources.
2. Strategise: Be well informed, so your decisions have clarity of thought and a clearcut strategy, pl. remember you are the captain of the ship caught in the storm on whom the life of the passengers and crew depend. So steer your ship safely to the shores in these times. A less ambitious target, or sailing your company through or seizing an opportunity that comes suddenly, are all task you should be well prepared for at a physical and mental level.
3. Impact on SUPPLY Chain: The entire SUPPLY chain is impacted right now . Some will have greater holding power, some less. So we are all sailing in the same boat. Please remember a bigger player has that many more problems to deal with. So you can take solace from the fact that there are companies who are holding on in spite of their problems. So learn to hold on and not give up easily.
4. Cut expenses: Expenses have to be controlled in times of crisis. One of the avenues is to cut costs in areas of Travel (when lockdown opens), you could use more of technology like video conferencing to interact with your associates, subordinates, suppliers, customers and this may soon become the new norm in the post lockdown phase.
5. Rent Agreements and Lease Holds: A good way to cut expenses is to talk to your landlords for reworking certain rent agreements for your office, factories, galas, shops etc. Many large-format stores have talked to the malls and have reworked their rent agreements for this interim period
6. Staff Layoffs: Then the next obvious choice is to cut down on staff or workers during the crises. Refrain from doing that. Avoid letting people go as far as possible. Remember, your staff has been your source of strength for years. They have helped us to be where you are today. They have their families to feed – and depend on you to do that. So, keep that in mind when you reduce costs.
7. Working Capital: Banks and NBFC are flush with funds now and the government has made it mandatory for them to lend to MSME and SME at nominal rates of interest so loans on easy or no collaterals can be worked in a matter of days, that could augment your working capital to help you tide over these times.
8. Inventory Disposal The best part of our industry is that a wide variety of items in the intimate basket are need-based therefore we don’t estimate a large shortfall in demand except for high ticket luxury items. When the market opens, the demand may be slow but it will pick up in the days to come.
9. Cash Liquidity: Our suggestions are that you clear off at least 50% of your inventory at the earliest so that you don’t end up with cash flow problems, incase there is a relapse in lockdown or phased lockdown.
Don’t be over sensitive on the pricing, you may have to extend an extra discount to lure the buyer to lift your inventory. Pl. remember that he too will be facing a similar problem of liquidating the stocks immediately so unless he sees a good bargain he wouldn’t be lured into the deal.
10. Planning your Production: With no clear cut signs when the lockdown opens and most of the migrant labor has gone back to their villages this will be a huge challenge in planning your production. Don’t in over-ambitious in creating a pile-up of inventory thus causing a huge drain on your working capital. Be judicious in utilising your resources and planning your production in keeping the near short term and mid short term requirements. Talk to your sales team, taking them into confidence. After all they have to sell the produce in the market.
11. Automation: Since skilled migrant labor is scarce and as an MSME you have always wanted to automise, so now is the time to plan and execute them. This will also create new viability in lowering certain fixed and variable cost which will have a direct impact on the profitability of the company.
12. Cooperation and Compassion: Pl. remember these are difficult times for everyone who is equally or more adversely affected in these crises. So deal with a lot of compassion, cooperation with your suppliers and vendors and at the same time show leniency to your customers who are unable to clear your dues immediately. Remember that you have to adopt a policy of cajoling, emotional appeal but not of aggression because this will not yield any positivity.
13. Dealing with your vendors and customers: A deep understanding of the situation and your ability to stand by your trade partners in times of crisis will be the characteristic of how your company or brand will be judged in the market. So lay your policies clearly with a humane touch to your constituents and your staff because they too know to read in between the lines.
14. Vendor Payments: A way of keeping the cycle of business running in the market so there is no liquidity crisis after the lockdown it is imperative that you release the supplier payments periodically just as you would expect the payments and accruals from your customers. Remember this will help normalize the business cycles quickly restoring confidence in the market.
15. Wages and Salaries: In this trying times when everyone is taking a hit in their personal freedom to social distancing and work from home is the new norm. Social disruption and wage cuts will be a way forward. Draw a plan in terms of funds deployment, cash requirement, inventory replenishment, raw material requirements and other expenses like electricity, rents, interest payments etc. So wage cuts, or having a deferred wage plan is the way forward and your staff cooperation and their acquiescence is required in this to make it a success
16. Dead Stocks and Unused Raw material: In a bid to inject liquidity in your business, now may be a good time to get rid of piled up inventory and raw materials which you may no use immediately. Find a buyer to offload them quickly so that you can use the extra liquidity to keep your business afloat.
17. Contact Programme: Form a contact program with your employees at all levels, if you have a bigger team of staff and workers, make smaller teams of 10 or 20 with one person as a group leader, assign them some task, either weekly or daily. You can interact with them through Zoom, skype, google hangouts or on Whatsapp group, know their well being and so that they feel connected with the company. Remember these are trying times for them and their families as well. If you stand by your staff in these times of need, they will be indebted for you forever. So kindness goes a long way.
18. Keep Busy and Positive: It is a well known fact that a healthy mind is a gateway to a healthy body, so you have to surround yourself with positivity. Be positive and shun negative news, practice Yoga and Pranayama and other forms of exercises to keep your body and mind healthy.
19. Lean Business: As with your vendors and your customers and your workers, you have a godsend opportunity in streamlining all of these which you couldn’t in normal times. You can discard the rotten apples among your vendors, staff, workers and your customers who were spoiling your production, product and your image in the market.
20. Crisis Management: It is said that tough times don’t last but tough people do. An a lot of orders may get canceled, a lot of payment may be delayed, and so will inventory be impacted and raw material in short supply. Remember this is a cycle and you are merely a clog in this wheel, so your challenge is to remain clogged in this wheel and not be undone in this market however strong these forces are. Remember this is the only mantra to your survival and success.
WHO SO EVER SURVIVES THESE DARK TIMES HAS A BRIGHT FUTURE!!
WISHING YOU ALL TO REMAIN INDOORS, TAKE CARE OF YOURSELF, TAKE CARE OF YOUR FAMILY, WISH YOUR FRIENDS, ASSOCIATES TO REMAIN SAFE, TOGETHER WE WILL FIGHT THIS VIRUS AND BE VICTORIOUS.