‘Small businesses not just positive about recovery but also expecting up to 50% growth in 3-5 years’
September 24, 2020 12:09 PM
Ease of Doing Business for MSMEs: As businesses resume a more regular rhythm, they’ll regain their long-term visions instead of the day-to-day survival mode they’ve been in over the last few months.
The inflow of equity capital in impact investment sector has been at a CAGR of 26 per cent.
By Nikhil Arora
Ease of Doing Business for MSMEs: After almost six months into the Covid-19 pandemic, the lockdown is being released from most parts of the country, allowing businesses to have gradually resumed their operations with precautionary measures. Many startups and businesses which were caught off guard by the nationwide lockdown are now getting back on track with remote working and social distancing, as the new normal environment.
While many businesses have started planning on how to manoeuvre the situation to get back on track, many are still coming to grips with the impact that the pandemic has caused already and anticipating the future impacts. It is clear that the pandemic has brought an unprecedented level of disruption and uncertainty, especially to small businesses in the country. Despite being the backbone of our country and a major contributor to the country’s GDP, small businesses were largely untapped at a various level during this pandemic. From trying to survive this crisis to overcoming various challenges like lack of personnel, low demand and supply and no financial stimulus, many SMBs in India had to reconsider their operations.
According to a recent Entrepreneurship Survey by GoDaddy, 83 per cent of the Indian small businesses reported a reduction in revenue and nearly half of them had to shut their business. For many small businesses, the future is unclear. Due to the current situation, many businesses are having to reconsider the way they operate in the new normal environment. The survey stated that 45 per cent of the small businesses had to make changes in the way they operated due to the global pandemic. A huge number of small businesses in India are suffering from reduced financial investment due to the Covid-19 pandemic. More than 70 per cent of survey respondents saw an overall decrease in investment. 48 per cent of these small businesses saying that maintaining cash flow was the most pressing need to help keep their business running during this crisis period.
Despite the challenges, many SMBs have adapted to the new normal and are working to bring their business back on track. With technology being a saviour during the Covid-19 crisis, businesses have started adapting themselves to the new normal, increasingly using technology. With the help of a variety of digital solutions, many businesses are able to keep their business active, manage their operations and adapt their services to help survive in the present scenario. Digital solutions are enabling business continuity and giving businesses the confidence to recover from the drastic lockdown economic impacts. In fact, the Entrepreneurship survey also highlights that more than 60 per cent of the small businesses in India are confident that despite the slowdown and negative impact due to pandemic, their business will recover and continue to thrive. This clearly states that SMBs in India are resilient to get back on track. These small businesses are not just being positive about their recovery, but are also expecting to grow up to 50 per cent in the next three-five years.
In spite of these setbacks and the current Covid crisis, there is an entrepreneurial spirit amongst Indian small businesses and entrepreneurs. Many small businesses are stepping up for the community and supporting each other in these difficult times to help create a more positive impact. Several small businesses and entrepreneurs have been seen working with government and local organizations to help enable communities from financially weaker social groups and equip them to deal with the effects of the crisis. The Entrepreneurship Survey also shows that 37 per cent of the Indian small business owners surveyed say that they had started donating to charitable causes, which is double the number globally. One such example is Salim-Sulaiman’s Zariya Foundation, who are helping local folk musicians by taking care of their basic dietary needs during this pandemic and sending them financial aid.
It is very important for a business to keep a positive outlook. Staying positive can help leaders to consider and make more sound decisions for their businesses. A positive outlook can both encourage the business owner and their employees to keep going serving their customers, and can also help them tackle the challenges in a more productive way by giving their best.
As businesses resume a more regular rhythm, they’ll regain their long-term visions instead of the day-to-day survival mode they’ve been in over the last few months. Drafting the vision according to the new normal will be crucial for the business to sail. The first sign of the new normal is a huge wave of remotely working employees. After months of work from home, many companies have already granted a permanent work-from-home option for their employees. Embracing digital and mobile communications is another major shift that businesses need to adapt, to help succeed in the new normal. From using social media channels to communicate with customers to using chatbots for internal communication, the way businesses communicate will change. Apart from that, there will be many changes in the way business makes its decisions; with the difference in geographies and lack of in-person contact all the time, there will be more delegation of authority. Post this pandemic, businesses will be more agile and more prepared for such uncertain situations and will have a more rigid risk management plan in place.
Businesses will be judged on how they tackle the challenge, attitude and strategic choices. A cognizant response could build trust and goodwill, whereas bad decisions can pose a real reputational risk. Maintaining a positive outlook and accepting and adapting to the new normal environment can certainly help businesses overcome the brunt of this pandemic.
Nikhil Arora is the MD and VP of GoDaddy India. Views expressed are the author’s own.