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Empowering SMBs Post-COVID-19: A SMALL Framework

SMBs are expected to face several financial challenges post-COVID in areas like rent payments, quality human capital, low marketing budgets and poor digital presence. The SMALL framework is a useful tool for them to help them re-assess and improve their operational readiness for surviving this period.

Co-working Space

COVID-19 is expected to bring unprecedented havoc, especially for small and medium business enterprises (SMBs). Around 80 million SMBs contribute to more than 30% of India’s GDP and employ over 130 million people.

A number of problems are expected to impact SMBs, some of which are: (1) rents (office space), (2) lack of digital presence, (3) inability to afford quality human capital, (4) diminishing financial capital and (5) skewed marketing budgets.

We offer a simple solution using the SMALL framework:

1. Shared working/co-working: Without a consistent source of income, SMBs are likely to find it hard to pay their rents and retain their working space. Coworking spaces and shared working spaces can take off some over-head costs from the financially over-burdened SMBs and provide them with the additional advantage of world class amenities, state of the art infrastructure, networking opportunities and convenience at a low price . Platforms like GoFloaters, Awfis and 315 Work Avenue make it easy to book co-working spaces and cafes. In a report by Coworker, an online marketplace for discovering and booking coworking spaces and flexible offices around the world, SMEs are the most common demographics of co-working members (37.93%) followed by startup teams (27.12%). In a post-COVID world, we expect these numbers for SMBs to go further north.

Startups catering to providing co-working spaces are re-working their strategies in a post-COVID world by offering flexible, safe and hygienic co-working spaces. Re-designed co-working spaces with reduced density and strengthened social distancing norms would provide an opportunity to SMBs to relocate their workforce to such spaces.

2. Mobile devices: Mobile devices contribute to around 4.2% of the global GDP, which is around US$ 3.1 trillion of economic value. Building a consistent mobile presence has become extremely important for SMBs. Further, a Morgan Stanley report on ‘India’s Digital Economy in a Post-COVID-19 World’ projects Internet users in India to rise from 670 million to 914 million by 2027 and online shoppers to increase from 190 million to 590 million by 2020. The average spend per online shopper is also projected to nearly double to US$ 318.

Further, a report by Ericsson Consumer Lab suggests that the average time spent by Indian consumers on 4G increased by around 2.2 hours, which is double the global average of an increase of one hour. With the increase in mobile usage in India, SMBs can leverage marketing automation and attribution platforms like Phunware and Appsflyer that provide advice on user acquisition and mobile advertising solutions. These automation applications leverage granular customer-level data and create/manage cross-channel campaigns.

Automated applications allow the creation and management of cross-channel campaigns across mediums like email, social, web, and mobile in a single, central platform. That way, personalized and micro-targeted campaigns can be created and delivered in real-time. SMBs can leverage these mobile automation platforms to drive consumer engagement and foster long-term loyalty among customers.

3. Artificial Intelligence: With the democratization of AI, SMBs can leverage AI to aid their decision making. SMBs should understand the difference between BI (Business intelligence) and AI (Artificial Intelligence). BI leverages predictive analytics and answers the question of what will happen going forward whereas AI leverages prescriptive analytics, i.e., what would happen if we decide to implement a particular action/insight.

A report by Salesforce on small and medium business suggests that Indian SMBs score high on AI adoption. The only issue is the complexity of AI-software applications. Marketplaces like are providing a no-code software development platform. Similarly, SMBs can leverage conversational AI tools like and Haptik to target customers residing in Tier-II and Tier-III cities. Further, these conversational AI tools provide relevant recommendations by understanding a customer’s requirements after conversing with them – mimicking an in-store sales assistant.

4. Loans: With little or no business, SMBs are likely to suffer a serious financial crunch and may have to shut down. The Government of India has announced collateral free loans for MSMEs. All SMBs with a turnover of up to Rs 100 crore and with an outstanding credit of up to Rs 25 crore will be eligible to borrow up to 20% of their total outstanding credit as on February 29, 2020.

These loans will have a four-year tenure and the scheme will be open until October 31, 2020. Additionally, SMBs can leverage short term loans/sachet-loans offered by private players like InstaMojo to survive and run basic operations. Among other things, SMBs can utilize these loans to bolster their digital presence. Freelancers like tutors, stand-up comedians, gym and yoga instructors and teachers are expected to leverage these loan services.

5. Local Discovery: The impact of consumer reviews on online platforms is well known. However, most of the SMBs, especially in Tier-II and Tier-III are offline. The presence of online listings has a significant impact on the financial performance of a business. SMBs can leverage online discovery platforms like MagicPin and BuyNearby to showcase their presence online. These platforms can help SMBs become digitally self-sufficient and build on the importance of going local.

We propose that using the SMALL framework, SMBs can make big strides in sailing through the COVID-19 pandemic quickly and safely.

Anuj Kapoor

Anuj Kapoor is an Assistant Professor (Marketing) at IIM-Ahmedabad. His research interests include computational social science, marketing analytics, digital platforms, machine learning and causal inference. He has worked closely with companies and city governments to suggest more ways to become data driven. He has ongoing collaborations with various tech-startups in various industries.

Akash Chaturvedi is a tech-enthusiast and a software engineer at Qualcomm, San Diego. His interests are in IoT, 4G, Artificial Intelligence and Machine Learning Algorithms.