In this #MondayBlues Series, we take a look at the Uganda Investment Authority (UIA) report predicting the impact of the COVID-19 Pandemic on the economy.
Highlights from the report indicate;
1. Projected growth of the country is likely to decline substantially in the year 2019/2020.
2. The Domestic Direct Investment in the country is likely to decline in the financial year 2019/2020 by almost 50% from the previous year.
3. The workforce has been severely affected and most people are likely to either lose their jobs or get a pay cut.
4. Many businesses are adopting work at home policies to cut costs.
5. 56% of businesses have temporarily closed operations or production.
1. Increased Financing for SME’s
2. Creation of development funding for direct domestic funding
3. Funding of the Agricultural sector for export and import boosting.
4. Reduction of the VAT rate from 18% to 14% to reduce cost of production
5. Reduce the price of electricity prices
While we are encouraged by some of the recommendations made by UIA, businesses need to focus on staying afloat NOW, so that they are alive to gain from the benefits and changes for tomorrow.
Below are a few tips that we have considered for business owners, whether SME’s or Large corporations
1. COST CUTTING
It is extremely important for all businesses to go back to the drawing table and identify the expenses that need to be reduced or eliminated all together. In this season, luxury and unwarranted expenses are a thing of the past. Some excessive costs such as excessive branding and marketing costs, luxurious and expensive rental spaces, unnecessary office operational costs, costs that can be reduced by implementing simple strategies such as work at home policies or shifts need to be implemented.
Survival instincts need to kick in now and businesses need to ensure that they remain afloat as the economy recovers.
It will take time, but action needs to be taken NOW.
2. REINVENT YOUR BUSINESS
There is always an opportunity to explore during a crisis. Do not be shy about re-inventing your business.This can be in the form of the way you do business. Perhaps it is time to ditch paper filing and hard copy receipts. Or perhaps, you need to become more efficient and change your working hours for both your clients and your staff. Adopting and adapting to the new normal could save your business tomorrow by giving you a competitive edge.
This may seem similar to reinvent but it is not. While reinventing your business is about becoming a better business in terms of efficiency, rebranding is about your products and services.
Identifying new products and services could offer alternative sources of income for your business.
Perhaps you are a marketing business focused on billboard designs, maybe you could now tap into creating marketing designs for online customers and go completely digital.
Or maybe you are a boda boda rider, perhaps you could start delivering food or items for companies that do not own their vehicles.
Rebranding yourself will ensure that you enhance the products or services you already have and/or offer new products and services within the same/similar business objectives. It is time to think outside the BOX.
Negotiation is probably one of the best ways of overcoming any business problem. If you are a prudent business person, identify all your business contracts that may need to be re-negotiated. Some may be financial based such as loan agreements and delivery agreements. Some may be employment or independent contractor agreement or a tenancy agreement. It is time to be assertive. Approach your business partners, landlords, employees and contractors and talk to them about workable solutions.
This pandemic has not affected only you or Africa. The entire world has been affected, one way or another. Most people are understanding and willing to discuss options. Do not miss out on these opportunities.
5. BUSINESS SAVING AND CONTINUITY PLAN
It is unfortunate that the majority of business had little to no savings and had no business continuity plan in place. The assumption that tomorrow will take care of tomorrow is an ideology of the past. We have good news for you. It is not too late. Take a look at your current savings and start tacking some away for tomorrow. This is inline with our opinion on cost cutting. If you cut costs, you will have more to save for tomorrow.
As you start to save, save with a plan and goal in mind. This means, get to work and write out a business continuity plan. It will help to guide you on what to do in various situations.
6. INSURANCE PLAN
Businesses ought to consider having appropriate insurance plans to cover and shield them from any bumps on the road. Speak to an insurance agent and identify the insurance plans that could work for you. This is the time that insurance companies should start introducing new insurance schemes to help struggling businesses. If a scheme could be made for “kwanjulas”, a scheme probably already exists for businesses struggling in the COVID-19 era.
7. INSOLVENCY PLAN
While our hope is that the above solutions and many others will help business rise above the challenges that they are facing today, we are also cognizant that it might be too late for some businesses which need to consider insolvency.
Insolvency can take on various processes such as Administration, liquidation, receivership amongst others. It is important to contact a lawyer and ensure that you are advised appropriately on the different which process of insolvency works best for your business.
We wish you all the best and pray for a better tomorrow for us all.
We remain “A Better Measure”
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