MSMEs GO SNORKELLING IN EVER PREVAILING COVID SITUATION
Hope readers of this article are safe and sound with their family as the Covid situation has now turned into a full annual cycle and still going strong. Various classes in society have already been affected due to this but in my opinion, MSMEs are one who are facing war on many fronts. Let’s discuss how:
Revenue Reduction – MSME companies mostly survive on bootstrapping the revenue and profits they earn in a period manner. Due to a reduction in demand for a whole annual cycle, the bootstrapping factor is now redundant, and these companies are fighting the funds crunch. As shown in the above image, these companies are like gladiators who are now prominently fighting cash flow reduction or in some cases decimation.
Workforce Management – The companies are also obliged to not lay off the employee in masses, although it is being done in many sectors but not effectively in MSMEs and that too in very high number due to non-clarity over the situation and legal obligations. As if they lay off the employee in massive number, then they might not be able to hire them back if demand rises suddenly as the covid situation is unpredictable. Thus, it builds a double-whammy along with Front 1, on one side income is broken and saved cash is drained due to prolonged covid situation and demand subduction and on the other side outgoing of funds to manage the workforce and salaries in the same duration.
Market Heavyweights – Also, we should not forget that even market heavyweights are bleeding money and that too more than MSMEs. So, if the situation improves, they will put every inch of their influence and monetary force to cover up losses while MSMEs do not have such big fund to market and that too with a depleted account. So, a triple whammy.
Although there is no magic wand that will solve the problems of the MSME companies there is a long-term solution:
- Use Offensive tactics such as having a set of patents, designs and copyrights owned by your company’s. Dear MSMEs, the way to success always depends on how strong your base is; and this base can only be made if you have proprietary and monopoly rights in your name. If you have a flagship product, do not go on a generic path and keep manufacturing without innovating in that product as generalism always leads to a narrow path with a lot of barriers. Innovate in your product, make them better and then protect it through patent or design rights.
- Use cost-effective marketing techniques such as spiralling your product video in innovative and promoted through ongoing trends and dwell in the local market. Nowadays, many aggregator start-ups are looking in a hyperlocal market as creating a monopoly by a local company in a local market by saying and rightly claiming that their products are better or cheaper than competitor heavyweight’s is much easier to achieve.
While summarizing this article, I would only tell one thing if you can pull up in this covid situation without shutting shop then you can thrive the market and thrash any competition in a normal situation.
Author of this article is a patent agent and runs multiple companies in services as well as product domain.