Hanifa is a strong and resilient entrepreneur. From scratch, she has managed to build a successful tourism company that operates in Pretoria, South Africa. In March when most of the countries in the region issued travel restrictions aimed at stopping the spread of the coronavirus, her business, just like many others within the service industry globally, temporally closed.

“Business was good before the outbreak of COVID-19, and we had many bookings, but a majority of the tourists had to cancel their travel plans because of the restrictions,” Hanifa complains. Today, she is at home keeping tabs with the virus spread trends and hoping that it will soon be defeated to enable her to bounce back.

A constant rise in the spread of coronavirus does not only continue to dim her hope and 2020 revenue projections. It also raises a lot of concerns for her because of the other business recurrent expenses that she has to grapple with; rent, payroll, utilities- amid the uncertainties of when her tourism business will reopen.

COVID 19 has indeed inflicted a very severe financial havoc on many Micro, Small and Medium-size Enterprises (MSMEs) around the globe, leaving entrepreneurs like Hanifa, struggling in its wake.

According to the National Federation of Independent Business (NFIB), as of March 30, almost 92% of small businesses said they had suffered negative effects as a r­­esult of the pandemic. Just 5% of small-business owners said they had experienced no effects at all.

Also, a recent study by the African Development Bank (AfDB), warned that countries in the sub-Sahara, are going to face unprecedented debt burdens as a result of the massive borrowings to gap the dwindling domestic revenue collections. MSMEs that provide the much-needed jobs, government revenues by way of taxes, and import substitutions, have all suffered severely, while others shut down completely.

Businesses all over the world, particularly MSMEs, are faced with a four-phase process during this continued lockdown: shutdown, supply-chain disruption, demand depression, and finally, possible recovery or extinction. But in every dark cloud, there is a silver lining. Despite the gloom realities most businesses are facing, because of COVID-19, some forward-thinking entrepreneurs and executives have already crafted after-lockdown exit strategies and recovery paths for their businesses.

As the Indians say, “you cannot cook rice well by just dreaming about rice”, hence, in this article, Human Capital International  presents four recovery strategies that businesses, particularly, MSMEs, can employ on their recovery path to bounce back.

1. Evaluate your Human Capital Position

One of the major steps in developing a rebuilding strategy for your business after the lockdown is to critically assess the current skills-set position of the business and to be sure you have the required complement of the talents and competencies to deal with the challenges of the new normal. As MSMEs continue to deal with COVID-19’s unprecedented financial impacts, entrepreneurs and executives must ensure that they make bold and yet well-thought-out staffing decisions.

Employees are always the most valuable assets and assured source of long-term business sustainability and competitive advantage. A business that has any prospects of success and growth in this post lockdown new normal should do everything possible to not only retain its capable and excellent employees but also take steps to retrain for upskilling, recruit, and or outsource for other critical industry-related expertise. Recovery of businesses in any disruptive situation like this lockdown starts with the attraction and retention of people with the best talents, necessary competencies, analytic, and systemic thinking skills to fully diagnose the extent of disruptions and offer appropriate solutions for business resilience.

2. Remodel Your Revenue streams to remain solvent 

One of the many layers in businesses that have been hugely affected during the lockdown is the revenue streams, thereby negatively impacting on the financial position of most MSMEs. Many of the revenue streams that companies have been depending on may take a long time to resuscitate or will never be restored.

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For example, for companies in the sports and entertainment industry that depend heavily on large crowds for revenue, this stream may not be viable anytime soon. For some other businesses like hotels and tourism-related industries, there is an urgent need to remodel operational strategies to ensure a steady flow of income because of the much-needed social distancing policies.

Customers are now very much concerned with their health and safety needs, forcing companies to invest heavily in technologies that can gather crowds virtually without compromising their health and safety concerns.

An old African proverb says “you cannot build a house for last year’s summer”. As such, companies should start now to innovate ways of new payment systems, and low physical contact methods of products and services delivery, to restore revenue for survival.

It is also possible that your business may have been very badly hit by the lockdown with no immediate capacity to generate revenue. Given such a scenario, there is a need to resort to some other means of financing to ensure steady cash flow. The following alternative sources may be worth exploring to help you remain solvent: small business loans from banks, online lenders, or Credit Unions. Based on your past performance, you can also utilise other sources such as Equipment Leasing or financing, Accounts Receivables, Lines of Credit, Merchant Cash Advances, Vendor Tradelines, and Purchase Order Financing. You must, however, bear in mind that these sources of financing could be very competitive and most require some form of collateral.

Some countries have also come up with measures to cushion their entrepreneurs from the severe impacts of COVID-19. Governments have either reduced taxes or instituted flexible payment terms to help reduce the burden on businesses. For example, Kenya, Uganda, Ghana, and Botswana all announced varied forms of tax reduction and forms of deferred payment for even statutory payments such as employees’ social security contributions.

3. Reflect and review your business strategies

Your business plan and model may have worked to perfection before the outbreak. The same models may not work unfortunately post lockdown. Supply chain systems have been altered, customer needs, expectations, and experience journeys have all been modified. Data and data analytic intelligence has become an integral part of business models, causing Fintech companies, mostly without brick and mortar structure, to raise the bar of the competition in almost every industry. Now is the time to reflect deeply, as an entrepreneur, and as a business, and adopt strategies that work best for you.

During the lockdowns, some businesses have continued to not only survive but have generated huge revenues. In reviewing your business strategies and models, therefore, take steps to look at your industry and the competition to gain deep insights into the trend and the extent of change taking place. This will help you adapt an appropriate strategy that can pivot your business to success in the days ahead. Try to understand, for example, what your competitors are doing in terms of distribution and supply chains, customer experience innovations, technology investments, and their human resource directions.

All these are pointers to the new opportunities taking place in your industry, gaps that you need to pay attention to, leading you to create a niche for yourself, and avoid becoming a mere statistic among the millions of businesses that have collapsed because of COVID-19.

For most Micro, Small, and Medium size businesses, these are very difficult times, and at Human Capital International  we offer you access to industry-related mentors and experts that offer solutions and advisory services that can guide you. Perhaps you should take advantage of our remote mentoring and advisory services.

4. Think ahead of the next crisis and plan for it

A business is like human life. One single storm can cause a major disruption in your entire ecosystem, and if there are no prior and adequate preparations to insulate you, the effects can be very devastating. Challenges and unexpected events in business are normal occurrences, and if there is one big take away from COVID -19 for all entrepreneurs, it is the critical need to have a mitigating plan in your business’ strategic blueprint for such future shocks.

This article will interest­­­­ you: Post COVID-19: Rethinking the Opportunities in The Next Normal

Do not assume that no other crisis will occur again after the coronavirus. Many more crises are bound to happen and disrupt your operations. However, you can learn from COVID-19 to insulate your enterprise from future disruptions. Among the mitigating strategies, may include setting up a contingency fund, increasing business investment in liquid assets, and reducing non-essential spending to ensure a solid-liquid cash position. You may also have to rethink your operational models regarding the efficient use of the human talents in your business vis-a-vis working remotely.

When businesses are forced to close down in crisis like this pandemic, not all of them can open their doors again. And for businesses, every such sudden shock, challenge, crisis, or pandemic, have both people and financial implications. And while there’s no way to lower the risk of the crisis, there are critical measures that can be taken to protect the bottom line from the fury of the crisis.

Hence, learn from this COVID-19 lessons, anticipate the next possible storm, and begin thinking creatively and systemically to maintain readiness – technically and financially – to weather the effects of any such future eventualities because the next one may just be around the corner.

Remember that the severity of the effect of the impacts of any such disruption will largely depend on the policies you put in place. Therefore, think, and put in place a disaster plan and adequate intellectual and physical insurance to mitigate the impact of such a crisis.