Navigating your business during Corona-virus pandemic

For the better part of this year, countries around the world have been battling the Corona virus pandemic that has so far claimed over 118,000 lives and infected almost 2 million people (when this article written). Some of the precautions that governments around the world are taking to prevent the spread of the virus include the following:

• Limit movement from one place to another except for essential goods

• A full lock down where citizens are expected to stay indoors

• Closing of the airspace to prevent new infections from abroad

• Enforcing social distancing rules among citizens in public spaces

All these measures have impacted the business environment in a variety of ways as follows:

• It has delayed the completion of projects and delivery of goods to international customers

• Where the virus has already infected workers, companies have shut or downgraded their operations

• It has stopped business travels and prospecting for businesses looking for new markets

• The market for non-essential goods has dwindled as most markets are diverting their funds to dealing with the pandemic

• It has been hard to source for essential parts for assembly businesses as some crucial suppliers have shut their production lines

Steps to Mitigate the Effects of the Disruption

International businesses that have been caught up in the pandemic can take a few steps to ensure that they stay afloat during and after the pandemic while ensuring that they honor their contractual obligations where possible.

1. Renegotiate Contracts with Customers

If there are ongoing projects, businesses need to renegotiate such terms as completion period with the respective customers. This gives them time to monitor the situation without failing to meet their legal obligations.

2. Renegotiate Credit Terms

Most international businesses use short-term and middle term business credit to supply goods or complete their projects around the world. With the disruption, they will not be able to deliver these services and, therefore, the payment will not be forthcoming. They need to renegotiate the terms with the creditors to halt payments without getting penalties for late payments.

3. Take Advantage of the Stimulus Packages

Different governments around the world are offering various financial incentives to ensure that businesses remain afloat. These incentives include guarantees, tax cuts, loan waivers and reduced price per unit for utilities such as electricity and water. Small international companies can take advantage of various packages that apply in their area of business. This will help cut back the losses that they are currently experiencing and remain afloat beyond the pandemic.

4. Look for New Opportunities

Where a business can meet the new needs brought about by COVID-19, it should consider taking advantage of such opportunities. For example, governments across the world are looking for ventilators for the severely sick. Car manufacturers can take advantage of the opportunity to remain in business. On the other hand, textile industries can start producing masks for local and international customers.

Measures to take Post-Pandemic

After the pandemic, international businesses need to rethink their strategy and crisis management plans should a similar crisis happen in the future. Here are some of the steps that can take.

• Set aside emergency funds that can cover part of the recurring costs for at least a few months

• Diversify their production and markets to avoid relying on one product

• Consider setting up local branches in markets where they have a strong presence

• Look at emerging technologies that they can harness to lower costs and remain in production during a crisis

• Support crucial suppliers that may have been adversely affected by the pandemic

The above steps cover different aspects of the international business and the general operations of any company. They enable small businesses to handle salient aspects such as the financial decline, production problems, and offer some form of a safety net should similar problems happen in the future.

At Frontech Ventures, we are committed to continuously support our clients in developing and executing their growth plan towards emerging Asia market.

Reach us if you would like to know how we could truly support your innovation launches internationally.