Small and medium-sized companies face three major challenges. This is the way to face them to avoid the contingency of COVID-19.
4 min read
There is an uncertain future that hangs over the more than 4.1 million SMEs that exist in the country, given the impact of the COVID-19 pandemic and the call to the population to stay home. This has caused the closure of businesses and the decrease in commercial activity.
According to WORTEV , an accelerator and funding company that captures, invests and optimizes capital for small companies, it is vital to meet the needs of these economic units, which generate 72% of the country's jobs and 52% of national GDP, according to data of the Concanaco Servytur.
According to the Latin American Association of Micro, Small and Medium s (Alampyme), the business sector will only work at 20% of its capacity or will stop its activities completely.
Faced with this economic situation, Denis Yris, CEO of WORTEV, identifies three challenges: cohesion of the organization, drop in sales and lack of liquids. The expert proposes the following measures to get around them and strengthen your business.
1. Cohesion of the organization
Challenge: With the government-issued health emergency notice, all non-essential business activities are suspended and everyone is sent home. How to guarantee the correct collaboration between those who continue to work both in person and remotely?
Opportunity: adaptation is the key to maintaining a company. There are free tools for task management, videoconferencing and document development that allow monitoring and continuity of processes. It is also time to make the most of technology and train the team, keep it motivated and productive.
Related: AIUDA.org created to support SMEs affected by the contingency to migrate to electronic commerce
2. Drop in sales
Challenge: Given the preventive measures of contagion that urge the population to stay home and financial uncertainty, SMEs have declines of at least 50% in their sales.
Opportunity: before looking for strategies to expand the market, it is important to concentrate efforts on current clients, as well as the evaluation of processes and plans that allow them to be retained. Loyalty actions, personalized contact and investment in adequate means are initiatives that maintain constant communication between collaborators, customers and suppliers, this in order to easily resume it when normal activities are resumed.
3. Lack of liquidity
Challenge: the drop in sales translates into financial liquidity problems. In addition to the obvious problems that this represents in daily operation, to cope with this type of contingency, SMEs regularly hire technology platforms, equipment or external consultancies that generate additional costs.
Opportunity: it is essential to make financial projections that cover a period of four to six months with different types of scenarios. A crisis contingency plan allows evaluating how the business will be affected and how to cover basic expenses.
Through specialized infrastructure and equipment, WORTEV helps companies achieve an efficiency of up to 10 to one. In addition, it supports SMEs with financing through WORTEV CAPITAL, a private equity fund that since 2018 has raised 24 million pesos from more than 500 investors