With the current spread of COVID-19 pandemic, the world has got locked down. It is an unfolding event bringing uncertainty to every business. This pandemic has resulted in businesses making decisions for the short-term with implications for the long-term that are not yet being fully understood. It’s time to take control during the current crisis and invest in the build-out of a more resilient business.

Recovery and the speed at which the economy will recuperate shall depend on a multitude of factors:

A)    Demand-Side Drivers:

• Upliftment of supply restrictions leading to Pent-up demand
• Change in Seasonal demand during the Summer period
• Shifts in consumer behaviour due to social distancing, healthcare experience
• Recovery of demand for exports in other countries

B)     Supply-Side Drivers:

• Availability of imported raw material, sourcing from other countries
• Access to affordable capital, loans, insurance
• Measures by RBI to infuse liquidity in the economy
• Dependence on the return of migratory labour and casual labour

C)    Other Drivers:

• Duration of COVID-19 outbreak period
• Change in consumer sentiments post COVID-19
• Change in Organizational behaviour & policies towards remote working
• The ramp-up in affordable and accessible basic public health
• Restoring the gig economy
• Government stimulus package
• More emphasis on Make-in India initiatives
• Monsoon intensity and time period

Businesses need to be well-prepared and need to formulate a flexible plan to respond to existing scenarios to emerge stronger.

Some of the key actions required will be:

A)   Ensure Business Continuity: One needs to assess the internal factors such as people, processes and technology to ensure business continuity. For eg: cybersecurity measures and infrastructure up-gradation during work-from-home.

B)   Liquidity and cash flow management: Many businesses are already feeling the impact of COVID-19 on cash flows and it is very crucial to assess the liquidity in the business. Businesses need to improve their runway by evaluating and forecasting cash flows, implementing cash conservation measures and do scenario planning to preserve value thereby resulting in continuous access of capital.

C)   Effective Cost Control Management: During these unprecedented times, driving a profitable bottom line will be the key objective of every company. One needs to formulate different strategies to defer/reduce costs through renegotiating contracts, doing an in-depth analysis of cost structures and rationalizing each and every cost head. At this moment there are no ‘ fixed costs”. Every cost needs to be challenged and optimised.

D)  Revenue Growth Strategies: COVID-19 has got the majority of businesses to halt their operations temporarily due to global lockdown. This has started to result in declining revenue for the businesses and moreover, uncertainty has made things worse. This is the time where the “network effect” can become instrumental in exploring and generating different avenues for sales. Strategic tie-ups with the right set of institutions and other companies will help to generate more revenue.

E)   Marketing and Sales review: One needs to review and restructure Sales & Marketing channels to expand customer and network reach. Various effective digital marketing techniques need to be implemented to make an online impact.

F)   Reinforce Supply Chain: One needs to evaluate inventory priorities on the basis of supply chain and demand. Businesses need to identify the critical partners of their supply chain and need to establish stronger relationships.

G)  Identify behavioural shifts and adapt offerings: Post COVID-19, there will be a change in consumer sentiments. The purchasing patterns will differ and the sensitivity to different products will change in different proportions. One needs to assess and identify those behavioural shifts and capture the white spaces, to build a strong consumer connect.

H)  Liquidity Support: Due to complete lockdown, while revenue is getting dried up, necessary fixed costs need to be incurred. During these unprecedented times, one needs to have ample “rescue capital”. As things start to improve, businesses will need “restart capital” to be back on track. At this point of time, promoters need to have an open mind and access all sources of capital to increase liquidity in the business which will ultimately lead to an increase in cash buffer thereby increasing the runway. As they say “Cash is king”.