The whole fiasco of the Covid-19 pandemic is out of the control of Governments, International organisations and companies worldwide. The pandemic has caused severe health and economic crisis, pushing millions of people back into poverty. The after-effects of the pandemic are unclear, and the future is bleak for many people worldwide. It takes significant time and resources to achieve the growth cut short due to the pandemic.
Frequent waves of virus spread and following lockdowns to control the spread have severely disrupted many businesses’ conventional production and supply chains. As a result, many companies had to take hard decisions to shut shop, leaving many unemployed, written off loans, and consumers. The situation must be managed at the highest levels of business and bureaucracy, including significant policy changes to incentivise companies, encourage consumption, etc.
Businesses, especially SMEs, will bear the brunt of the pandemic due to lower demand. The pandemic has particularly affected specific sectors such as tourism, office spaces and others primarily catering to where virus containment measures were introduced. Small businesses are less flexible in adapting to the demoing situations and dealing with the losses.
Key Takeaways from the Ongoing Covid-19 Pandemic
There are many key takeaways for all from the Covid-19 pandemic:
- Any pandemic can be a global phenomenon and may stay for a longer duration. Humans should be prepared to tackle the ill effects of the pandemic.
- Pandemic adversely affects the social and economic conditions with significant after-effects.
- Pandemic results in the shortage of available medical facilities due to the heavy inrush of patients. In some countries, welfare schemes may need to be twisted and result in the national governments’ adoption of food and fuel rationing schemes.
- A pandemic can be very dynamic with a resurgence, and businesses should adapt to continuously changing situations.
- Companies should have a detailed Plan Prepared in a pandemic to ensure minimal damages to their productions and supply chain capabilities.
- Companies should have an adequate Business Interruption Cover and necessary capital reserves, which may assure their survival during the pandemic and post the pandemic.
- The Supply-side can face issues from the shortage in labour due to the workers or family members affected by the virus are looked after. The frequent lockdowns can restrict the movement of the people. It will result in a severe reduction in the capacity utilisations and effects from supply chain disruptions to a parts shortage.
- The demand-side may be negatively affected due to the loss of income due to non-attendance due to ill health, restricted movements and containment measures. The heightened level of uncertainty and fear of the virus resurgence reduces consumption and consumer confidence.
Business Plans for SMEs to Tackle Covid Effects
The below as coming of the measures that businesses can consider t tackle the effects of the pandemic:
- Companies must work to protect brand image and reputation. All the brands should adapt to the new normal sooner.
- Companies should focus on consolidating their customer base and recover the market share lost due to the pandemic.
- Businesses should focus on reducing costs and recapitalising business operations. The reduction of the expenses can be in office rent waivers or deferments and working with the banks to restructure any existing loans. Businesses can also tap into new working capital loans under new pandemic support schemes run by several regional and national governments.
- The supply chain side plays a vital role in the success of the business. Companies should take extra precautions to ensure adequate stock of all raw materials available for production. It is carried out by regular inventory checks and booking pre-orders from different vendors.
- Adequate hygiene and safety protocols should be employed and strictly followed to reduce the risk of spread among the staff. Is it also essential to provide health coverage for all the employees and their dependents?
- Due to the prevailing uncertainty, businesses should deploy a sound IT infrastructure with cloud support. The IT systems should take care of the daily data backup, theft-proof and support remote working for employees.
- The pandemic can open many doorways and Business Opportunities both locally and internationally. Companies should carefully examine the pros and cons, can venture into new areas.
- Companies can benefit by adopting digital strategies as digital has gained an edge over the conventional methods during the pandemic.
How Can Jaxa Help?
Jaxa Chartered Accountants are one of the well-known accounting and audit companies in the UAE. Our offices across the UAE provide client-centric services such as bookkeeping, auditing, invoice generations, VAT and payroll for companies operating in the UAE mainland and Freezones. Please Contact Us for any assistance on financial advice. We’d be happy to help!
