Today would have been the end of the lock down. By tomorrow, we would’ve all be free to move around, get back to work on Monday and also hopefully life would resume as normal. Unfortunately, things did not turn out as planned and we are slashed with a extension of the lock down until the 5th of May. Who know what lies ahead? We are indeed living in some unprecedent times.
The events that unfolded were far from what we expected for some whilst for others, they were shocked by the outcomes. This range from the work from home arrangements for many in affected regions to say the least, to the very extreme end of closing of businesses in the formal and informal market to the extent not classified as essential services.
Personally, I have made the following observations from a businesses perspective:
- Not all businesses will survive this pandemic’s impact due to either the type of business they are in, the size of the business as well as the phase in the business cycle they are. If your business is classified as essential services, you are likely to stay afloat for as long as none of your labor force contract the virus but expect a decline in revenue due to the fact that not all your products will be permitted to be sold during the lock down period and your customer base is affected due to limited movement as well as a reduction in spending. With that being said, those businesses are at least safe.
- Secondly; you will have those businesses who are forced to closed down and their operations do not allow for remote working nor are they permitted to make any sales and hence their ability to survive and keep their employees will depend on many things such as the level of cash reserves prior to the lock down, the support from related parties, government and any form of assistance as well as the length the pandemic is likely to last. These businesses will be in distress and will likely face liquidity and solvency risks.
- Lastly; you have your businesses that are expecting to benefit from this epidemic. These are your pharmaceutical companies, IT related businesses and any business that is likely to gain relevance and adaptability in such challenging times. This is because post this lock down, business is unlikely to return to “normal” and some business can expect to pick up market share either left behind by those that could not survive the impact or by those who could not move with the times.
Similarly, we can also expect to see a pararell implication to individuals. How we will survive is also linked to the sort of environment we are in especially from which we derive our source of income.
- A portion of us are likely to face retrenchment without enough severance packages due to sudden closure of the business we work for and the unpreparedness of those business to such events. This is likely to be the guys that work in tourism industry such as hotels, restaurants ; airline industry as well as company that are unlikely to gerenerate any revenue due to this lock down. For many of us, we will be forced to dip in savings if any or rely soley on family/ friends as well as government’s support to get us through this tough time.
- A fair number of us are likely to face salary cuts as businesses are trying to shield themselves from the ripple effect of the changes in the economic activities. Although not the ideal position, the people in this category should at least be grateful because cost adjustments here and there, credit/loan arrangements might be able to get them through the trying times.
- A fair number of people that were looking for jobs pre these events are likely to find it tough to find anything in the interim and hence will have to wait a little longer.
- Lastly, the lucky crew- these are unlikely to be highly affected and for many they may even be able to capitalize on these such as starting up business that are relevant or taking up new opportunities as they arise.
At the end of the day, you are unlikely to change the situation you found yourself in but can do something about the way forward.
In the next series of articles, I will give guidance on certain tips one can do in this tough times. This will generally only apply to those that are in small businesses as well as individuals not the big corporates.