Small- and medium-sized enterprises (SMEs) need to look at opportunities, not just the threats posed by the coronavirus disease (COVID-19) pandemic.
For example, some SMEs have jumped on the e-commerce bandwagon to sell their products online and accept cashless payment, offering customers a safe and convenient way to shop.
“Each crisis brings about opportunities and dangers,” says Francisco “Jay” Bernardo III, an entrepreneur and professor at the Master in Entrepreneurship Program of the Ateneo Graduate School of Business in Manila. “Do not just look at the dangers, you must also look for opportunities… Take advantage of these opportunities. It’s good for business.”
Foo Ngee Kee saw a chance to reopen his three-star hotel in Sabah during the state lockdown. He decided to open Courtyard Hotel @1Borneo for medical professionals and as a quarantine station for people who were required to undergo self-isolation, such as those returning from abroad.
“I saw an opportunity to make some money,” says Foo, who is also the founding president of the SME Association of Sabah. As a quarantine station, Courtyard Hotel could continue to earn revenues and provide jobs for staff. However, the hotel had to meet certain requirements, such as using separate entrances for regular guests and those under quarantine.
John Carlo Tria, president of the Davao City Chamber of Commerce and Industry, took the pandemic as an opportunity to expand his coffee farm. Knowing demand for food is expected to remain stable despite the crisis, he decided to shift some of the company’s resources to boost his coffee business. “It’s a strategic move to take advantage of the demand for food.”
To arrive at these kinds of decisions, SMEs would need to assess their competitive position and their business plans, says Tria. That will be the basis for businesses to plot their recovery and be resilient in the longer term.
Be ready to pivot
When they see an opportunity, businesses should be ready to pivot, says Bernardo. “You try to reimagine what you can be. Right now, your product may no longer be relevant to what is happening. Can you pivot to another thing?”
He cites how the crisis prompted distilleries to produce hand sanitizers and garment manufacturers to make masks and other personal protective equipment. “These businesses shifted because they saw an opportunity. They did not wait to do something else. They knew what they were good at and they shifted their strategy. They pivoted.”
Before COVID-19 hit, Foo was planning to start a business selling branded coffee, tea, and snacks to Chinese tourists visiting Kota Kinabalu. Knowing tourism would continue to be in a slump, he decided to refocus his sights on the local market and sell the goods online. He says e-commerce is a viable option for SMEs because it means spending only a fraction of the cost of operating a brick-and-mortar store.
Al-Haadi Abu Bakar, co-founder of Brunei Darussalam-based online technology news provider Geekturf, also had to shift gears because of COVID-19.
With Bruneians working from home, Al-Haadi decided to produce content about essential computer equipment that they need. Typically, Geekturf carries content about new cellphones, gaming gear, laptops, among others.
Geekturf, which is active on Instagram and Facebook, is also looking at setting up an e-commerce arm to sell tech gadgets. “I think it’s a good way for us to diversify. We believe e-commerce is the next step for us,” he says.
Faran Jaya, an entrepreneurship coach, has been urging SMEs to start moving their business online because of the pandemic. Food and beverage remain a viable business for micro and small businesses as demand still exists, says Jaya, who heads Jakarta-based Wiranesia Foundation, which aims to foster entrepreneurship among Indonesians.
He notes that many customers now order via social media apps, making it more vital for businesses to go online.
Find a corollary business
Tria says as businesses deal with the crisis, it may be a good idea for them to set up a corollary business.
For instance, an agribusiness company can diversify and set up a logistics arm to support the main business as a new revenue stream. The logistics arm can serve other companies, given that many businesses are now going online, he says.
He stresses that there are opportunities amid the threats. “That’s why assessing your competitive position is important. You might find advantages, or opportunities you can take advantage of and strengths you probably didn’t realize you had.”