Small and medium-sized companies are the bedrock of our economy, bringing so many important benefits to our society. Many face challenges at the best of times but today with the country’s economy in deep freeze they are having to respond to a totally unpredictable state of affairs. Most have seen their businesses affected in one way or another. Here are just some of the issues they are confronting.
1. For those who fall within the scheme, there are real questions as to what happens when the Governments furlough scheme comes to an end. How many staff can be retained, indeed how many staff should be retained. If demand falls significantly there will need to be some form of retrenchment which will damage income flows and hence some of the existing costs will be trimmed. The question, therefore, is how much of this will result in reducing staff numbers.
2. I hear that where SME’s have outside investors, they have generally been supportive which is excellent news. It’s not clear how long this will last-hopefully through into the time when we are back to normal. Indeed, these companies may need to find additional support as we progress. There are regrettably also some companies who do not have supportive investors and need help to find other sources of financial help. Even with the problems we face today, I am aware of those who have a capacity to lend and are keen to find worthwhile investments.
3. Of course, the biggest worry is that demand for goods and services for the company’s products will fall. This is certainly likely to be the case in the short term for many. This will come back to looking at ways of re-engineering the operations, looking again at the marketing and sales strategy and finding the most appropriate route to pursue. This problem may go well into next year so planning for the next 18 months and finding solutions is an important business objective.
4. Whilst there are many concerns for business, it’s also true that serious discontinuities such as this can suddenly throw up new opportunities. They might be in the design of products, new markets opening, routes to market changing, gaps arising from failure of other companies. These can be thought about now and perhaps preliminary work done on the opportunity before the economy starts up again.
5. There are many other issues of concern but perhaps the most important is to dust down the current business plans and think about creating a new plan, capable of operating in the new market environment. It’s still a time for reflection and analysis to decide what should be done when restarting the business.