On the eve of International MSME Day, global not-for-profit Wadhwani Foundation has put out an advisory to MSMEs struggling to sustain and survive due to the ongoing COVID-19 related crisis.
International MSME Day 2020, is more of a sombre occasion requiring introspection instead of celebration. The extraordinary phenomena of COVID-19 pandemic has thrown the world economy into chaos and it isn’t surprising that the small businesses are facing the brunt of this economic shock. In this moment of crisis, there are three important questions that MSMEs need to answer.
- What should small businesses do to remain solvent post-COVID-19?
- What should they do to emerge stronger?
- How are where will they get expert business advice in these trying times? – a critical factor in helping them survive.
The pandemic led crisis is here to stay. Hence, it is imperative that MSMEs do not waste the crisis but instead look for opportunity in the same. Today’s situation demands prioritisation of survival overgrowth and meets the immediate challenges of statutory dues, wages and pressing creditors. Those who are able to do it will get the benefits as soon as the economy recovers, and the business momentum returns.
On the eve of International MSME Day, Dr Ajay Kela, President and CEO, Wadhwani Foundation, says, “The MSME sector is bearing the brunt of the economic shock due to the COVID-19 pandemic and many of them are struggling to stay afloat with just 30-50 days of cash left. The single biggest challenge for MSMEs is getting access to and being able to pay for quality business consulting services. While fresh capital will always be welcome, uncertainty around growth will challenge them around capacity utilization, investment in new business development, talent retention, sinking employee motivation & morale. My advice to SMEs is to reorganize priorities as per three-stages, (1) Survive: evaluate every avenue to save cash given the uncertainty (2) Stabilize: Be ready to pivot to meet new customer needs, through change and innovation (3) Explode: Don’t waste the crisis – as the economy recovers, build systems and processes to scale with new business models and products. In these unpredictable times, MSMEs with resilience and adaptive measures will effectively be able to tackle vulnerabilities such as financial stress, low demand, dispersed workforce and a downbeat export market, to survive and thrive”.
The single biggest challenge for MSMEs is that they are experiencing such a crisis for the first time, and the majority of them do not know how to act. Organizations, like the Wadhwani Foundation, are therefore focused on providing business stability consulting support, on a pro bono basis to SMEs for immediate strengthening of their business fundamentals, stabilising their business in the medium-term and facilitating rapid growth in the long-term.
MSMEs are the backbone of the Indian economy and they have the capacity to bounce back in playing a pivotal role to achieving India’s dream of a $5 trillion economy by 2025.