Covid-19 Effects on MSME Sector and Indian Economy
Covid 19 has badly impacted many small, medium, and large businesses, without any doubt but businesses can’t stop because “Businesses are used to face, ups and downs because of many situations” and this time covid 19 has become the reason.
Cash crunch and liquidity, loss because of the perishable nature of many raw and finished materials, migration of labourers, and low demand of goods and services because of multiple lockdowns have been faced by most of the businesses.
Hence, The Reserve Bank of India recently issued an advisory allowing banks to deduct the amount released to new MSME borrowers from their net demand and time liabilities. This means that banks are exempted to maintain the cash reserve ratio for the loans disbursed from January 1 to October 31 2021 to first-time MSME borrowers. Along with that many other schemes and benefits have been announced by the government of India, banks, ESIC, and other institutions as well.
“Every Time whenever such big issue comes there are some businesses who faced real tough time and few businesses who get the opportunity to emerge”
Government, RBI, and many other government institutions are taking many steps for economic growth but on a serious note, if you stay focused on your personal and business economy first, the nation’s economy will be on track automatically. The next 2-3 years will be very important for maximum business owners. If you don’t take the necessary steps, trust me, “Business Me Deemak Lag Jaega”.
So here are some important lessons which I learned in this pandemic is
- The only change is permanent, you need to keep changing the business model, process, and sometimes the entire business as well, take a fast decision and save yourself from huge losses.
- Never get emotionally attached to the business, attach yourself to the profitability and scalability.
- Fancy expenses in businesses can become slow poison for small and medium businesses so avoid whatever is possible, don’t spend a single rupee on those expenses which don’t help you in generating revenue activity.
- Restructuring of process, team, finance is a must-do task that should be performed on a regular basis.
- Audit of performance, sales, profit, the loss should be done on a monthly basis, if you don’t maintain that data with you, you’ll be finished soon.
- Earlier technology was helpful to scale the business but now if you don’t use technology, automation, result-oriented processes you’ll be out of the business soon.
- Having a mentor or business consultant can become the game-changer decision now (online courses are not helpful for a large number of entrepreneurs as the execution process is not that much easy).
- If you don’t invest in marketing, your future is dark, join my free WhatsApp growth grantha series for many free business growth and marketing tips.
- Offline marketing, one to one meeting, exhibitions are out of the trend now so learn the uses of meetings via virtual meeting platforms, invest in a good sales-oriented website, SEO, digital brochures & digital marketing.
- Personal branding is super important to learn the art of personal branding even if you have 2 team members in your business.
Now let’s Understand Some Possible Situations that are coming on our way
There will be no existence of businesses in almost every segment, so bad competition is going away slowly, hence profitability is going to increase:
- Keep an eye on your local competition, if someone is closing try to acquire its customers, process, machinery (low-cost acquisitions are going to happen).
- Many new opportunities will be created so try to add some more products/services to your bucket so you can make extra money with the existing resources, time and space.
- Avoid heavy investments, especially on expensive loans.
- Don’t invest in any new business which is dependent on a crowded customer base, but remember larger networks with like-minded people will definitely help you to get more business.
All the above learnings and suggestions are based on my personal learnings and extensive research. Every entrepreneur, especially in the MSME sector should make a list from the above 15 points and make sure that you start implementation of required suggestions. It’s high time when you should assess the entire business, mindset, finance, and resources. Focus on income and profit-generating activities, don’t fall in the trap of just revenues, and stop spending your time and efforts on non-income-generating activities.
Founder: MSME Story
Also Read: ADVANTAGES / BENEFITS OF MSME REGISTRATION