Business survival strategies: Keeping pandemic blues away
Pushkar Mukewar, CEO & Co-Founder, Drip Capital, explains how building customer trust, assessing risk and seeking consultation from experts are some business survival strategies that can help SMEs tide over challenges.
The nationwide lockdown imposed during the pandemic will see its second anniversary in a few months. Looking back, it is appalling to see the vast number of businesses that were forced to shut shop because of unanticipated disruptions like the global supply chain crisis, soaring raw material costs, labour shortage, and paucity of containers for shipment, to name a few. While most found it challenging to adapt to the emerging uncertainties, some businesses and their visionary entrepreneurs paved the way and came forth with innovative solutions to stay afloat. This blog looks into the interplay between struggle and strategy, and the problems surrounding some entrepreneurs over the past two years, their coping mechanisms, lessons, insights, business survival strategies and visions that others can emulate.
The Wait and Watch Approach
A lot of MSME exporters found themselves in the middle of a serious logistics challenge. Container shortages began to have a significant impact on export shipments, in addition to augmenting volatility, increasing freight charges and causing unprecedented delays. In this kind of a situation, patience may be the key for companies. Prashanna Sivaraman, Head of Finance at Sri Kanthammal Padmanaba Modern Rice Mill, talks about his current ‘wait and watch’ approach to business. He cautions companies to play safe in these turbulent times and only stick to well-known markets. He adds:
60% of our rice trade to African nations is conducted through containers. But the shortage of vessels has heavily affected business in this region, resulting in trade in the market coming to a standstill. There has been a 500%-600% increase in freight costs due to multiple bottlenecks, causing us to let go of some businesses and seek new markets and players. However, currently, we don’t have plans to go out of our way to procure new buyers and will prefer focusing our business in Southeast Asia and China, where conditions are still favorable.
To stay on top of its game, the company resorted to bulk cargo shipping as part of its supply chain innovation strategy. The unpredictable times have not left much room for speculation. However, Sivaraman still hopes for the best while preparing his team for the continuation of the crisis in the coming years through sound financial planning.
Insurance a must
Speaking on the similar lines of Sivaraman, Vyom Varshney, Owner of Eco Organics, also believes in opting for a conservative approach instead of a modern one, considering the highly unprecedented times. This involves taking minimum risks and undertaking thorough assessments to ensure financial integrity of the organizations. Companies must, for example, not accept orders without insurance, and prioritizing safety at all times as against taking on complex challenges
At the same time, he advises businesses to continue building trust with buyers and assuring them how much ever they can in these distressing moments. Consumers today are more sensitive to who they are doing business with. Thus, the 2020 Edelman Trust Barometer Special Report, found that for 53% respondents, trusting the company behind a brand or product is the most important factor when making a buying decision, even more than price. This can ultimately lead to improved customer loyalty, higher levels of repurchase, more referrals, and a better reputation.
Consultations with logistics experts
Another useful strategy to overcome uncertainties is to ask the experts. Stressing the importance of one-on-one consultations with subject matter experts, and staying abreast of key trends across various markets, Sreeram Innagalla, Owner and MD at SriAqua Seafoods, today, prioritizes the understanding of dollar calculations and costing as integral parts of conducting international business.
Moreover, the exporter also highlights the need to build a good rapport with freight forwarders and shipping liners “Nobody understands market predictions as brilliantly as these skilled individuals. They have a thorough grasp of the situation and can easily gauge the monthly costs for any specific destination. Although we have plans to expand to new markets, the time isn’t right, and this we understood through our robust network of talented logistics personnel,” adds Innagalla.
Besides gaining insights from experts to understand the most suitable geographies to target, their knowledge helps one realize which markets to avoid, considering the present situation. However, at the same time, Innagalla suggests it is crucial to continue establishing a network in all markets, as you never know when an unsung opportunity could suddenly knock on the door.
Building Customer Relations a Key
Outlining the significance of mindful yet cordial business relations, Aditi Goyal, Business Development & Operations Manager at Shreedhar Cotsyn Pvt Ltd, discusses the importance of mutually beneficial contracts as a business survival strategy that can keep both parties happy. According to Goyal, this will help maintain positive relations with buyers while showcasing how well you understand and value your clients’ needs.
Talking about the specific challenges her industry is currently enshrouded with, Goyal mentions that business was initially faring well until cotton prices skyrocketed, accompanied by a sudden fall in demand for Indian cotton due to tight supplies. Even industry experts claimed that Indian cotton has been facing stiff competition from its US and Australian counterparts, causing further damage to indigenous businesses. She explains:
Despite the rising raw material costs, our primary focus is to not lose out on our loyal customer base and strive towards enhancing their experience. Besides conducting regular communication with clients and absorbing their needs, we are compromising by paying high freight costs for our old customers even if it eats into our profit margin a little and arriving at a middle ground when negotiating contracts.
The big picture
Considering how these entrepreneurs have efficiently managed to rebuild their supply chain and do their bit to continue to stay resilient, businesses must manage risks, bolster customer relations and rope in subject matter experts to avert crises and stay resilient. Exploring innovative strategies & giving a proactive response to customers can also promote resilience.
Pushkar Mukewar is the CEO/Co-Founder, Drip Capital. Views expressed are personal.