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Personal Finance

Strategies for SMEs to weather disease

Communication
Communication and community engagement are key as firms grapple with coronavirus. FILE PHOTO \ NMG 

The coronavirus pandemic, though not the making of any particular person, could not have come at a worse time for the Kenyan small and medium enterprises (SMEs) which have received the short end of the stick for the last three years amid economic slowdown.

This is due to political activities in 2017-2018, strained access to finance underpinned on interest cap and heavy government local borrowing, accumulated pending bills by national and county government and taxation among a plethora of challenges.

This year was projected to be one for SMEs to recover at least before the next disruption period of 2021 and 2022 which presents as disruption due to political activities synonymous with most African countries.

Now that the coronavirus challenge is here and is not going anywhere at least in the short term, SMEs must develop a coherent strategy of coping with the challenge presented given they may not have too many options.

There are two powerful low-cost strategies at the disposal of SMEs — communication and community engagement.

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Cognisant that the coronavirus is new to most of us and information is scanty, SMEs must strive to be transparent ensuring it acknowledges that there are still things regarding coronavirus that they don’t know and reference credible sources such as Ministry of Health as well as World Health Organisation (WHO) when communicating to its various stakeholders.

Communication in this instance is multifaceted; communication with employees, suppliers and customers.

SMEs must reassure its employees being the engine of the business through constant communication of what the next steps are for the business through appropriate medium such as physical meeting, e-mail, SMS, WhatsApp depending with what is acceptable for the business. Communication must have an explanation how decisions of whatever nature came about such as working from home and how the future looks like even if it’s uncertain.

For example, recognising the fact that the coronavirus pandemic may take a while to ease and may affect sales, an entrepreneur may decide to cut salaries, send employees on leave, reduce benefits, require employees to pull double shifts. Whilst these strategies may be a good judgement call on their part, they must communicate the same logic to employees to put them at ease and seek their views before making the final decision.

Honest communication with suppliers such as reaching out and co-developing a crisis management agreement that includes but not limited to; discounts, staggered payment, extended credit periods among other measures will prove critical to riding the coronavirus wave.

Communicating with customers must be approached a bit differently; First focus must remain on what is very important to the customer at the moment which is disinfection at contact points to curb spread of coronavirus. SMEs must audit all plausible contact points in their enterprise and communicate through appropriate channels measures put in place to ensure maximum cleanliness.

SMEs must strive to provide relief to their customers and not take advantage through hoarding as a gesture of empathy. Relief could be offering discounts, extending credit terms,

Finally, regardless of size of the business, SMEs must stand in solidarity with the community that supports it by purchasing its products and services. Community support does not necessarily have to be costly; donating cleaning supplies and foodstuff for those in quarantine, donating to local boarding schools among many other options.

The writer is the managing director of Viffa Consult.

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