Amidst challenging and uncertain times, how can small and medium-sized enterprise (SME) entrepreneurs survive?
One of the greatest crises experienced by Indonesia was the 1998 riot that affected many big companies, driving most to collapse, while the SMEs grew to help restore economic growth. But facing the global coronavirus pandemic catastrophe which had a profound impact on both big and small companies caused panic in all walks of business including SMEs.
Jakarta Creative (@jkt.creative) held an interactive talkshow through its Instagram Live on 1 April at 6 pm, carrying the theme “How SMEs Can Survive Amidst the Coronavirus Pandemic?” Hosted by Iwet Ramadhan, the talkshow appointed Aakar Abyasa, the Founder of Jouska, an independent financial consultant company, as speaker to share his experience and insight to the audience.
In fact, this situation invites entrepreneurs to reflect on themselves, asking whether it is still possible to run their businesses. Aakar said that amidst this situation there are still profitable businesses, such as health care, medicine and food that are related with food security like rice, instant noodles, frozen food, homemade seasoning or spices or plant seeds. Other businesses that surprisingly rise and have good prospect are IT and content media also services and expedition business, which taking the opportunity #workingfromhome and #stayathome regulations.
“Actually, this situation forces us to think over the solution. It’s like in the movie Apollo 13, in the scene of a landing crash, usually people panic in bad situations but also trigger us to think about what to rest to save us from the situation. We are forced to think of solution. I’m sure, after this ends we will improve a lot and make this a great lesson that will produce an exciting business again.” explained Aakar.
Aakar shared two alternatives for SMEs entrepreneurs to get through this crisis situation. The entrepreneurs can try to simulate zero revenue for several months and determine what efficiency measures can be taken to survive, whether it is the cost of rents or renegotiate debt to the bank.
After that, determine whether to shut down the company or pivot (switching their business strategy). Closing the company ideally results in not falling further into debt, or at least still have some reserve funds for other business capital. For those who want to change the business strategy through a new approach regardless of the business model and product that is already running in the company, try to select what products still work in this pandemic situation. Entrepreneurial creativity and a keener observation in seeing other opportunities are needed. Make sure that the cash flow is still running even though profit is not maximal—at least don’t lose the business.
“Even though the business is still classified as SME but it’s important to reset our mindset, train yourself to treat the company’s financials like a big company. Discipline is the key factor in order the business can upgrade. If the company follows accountable rules, must be evaluated quarterly and reserve emergency funds, it will be ready to face a force majeure situation like this. And, no less important than all steps is stay positive thinking and don’t panic. Panic spreads faster than any pandemic. Do the best to save the rest of what can be saved,” said Aakar.