Getting crisis-ready: How SMEs can overcome a growth slump

Businesses will always have highs and lows and sometimes lows are more frequent and prolonged, as is with the textiles industry.

Every four years or so, this industry goes through a slump and the coronavirus pandemic dealt a double blow. Getting new customers for industrial businesses can be slow in a low season, which means as an SME owner, you can never stop your selling process.

Reaching out to new prospects with content marketing, building relationships and providing value-added services for long-term returns will have to continue. Firing people is easy during bad times but the SMEs that let go off staff have suffered more in recent times. Keep your flock together. When the economic revival happens, you will grow faster.

Have a wider base to drive growth. Contrary to what most SMEs think, in bad times, the effort to build a brand must be stepped up but without increasing the budget.

Focus on innovative messaging, smart social media campaigns and one-on-one interactions using technology.

The pandemic has taught us how virtual selling can be effective. Embrace metaverse meeting solutions for selling experiences.

2 Come up with new offerings

Some businesses were quick to understand market dynamics and moved fast to bag opportunities that the pandemic threw. Mask-making, home delivery of food and medicines, car servicing, lab testing and several such avenues opened up.

Train your people to spot opportunities and seize them before others. Some businesses were quick to recruit and train graduates to be home lab test specialists. If it is any consolation, Airbnb, Uber, etc began their business during the economic downturn.

Analyse not just your industry but your customer segment and find out the pain points. Offer solutions at reasonable costs and you cannot go wrong. Use lean startup models to quickly launch your services and improvise as you go along.

3 Execute meticulously

Do not wait to execute new ideas—lean management process, service excellence, a new product idea, etc. Once you spot an opportunity, put in place an execution plan with a clear stage-gate process and feedback loops.

For new offerings, start with existing clients. Use discovery-driven planning to help with the execution of ideas.

4 Seek out more references

In a low season or during an economic downturn, most successful SMEs cater more to the service needs of their customers. They can’t afford to lose them. It is the right time to improve customer service processes. While you are at it, set objectives to get more references from each customer, and encourage salespeople to get more testimonials.

Develop plans to partner with some customers to help them improve their productivity or efficiency. There are ways to seek references from customers: sometimes you have to ask for them or do a great value addition and the customer will offer references without you asking for them.

5 Plan for a positive cash position

Most retailers have a positive cash flow, with cash-paying customers and merchandise on credit. Some large retail chains get up to 150 days of credit. Not all businesses can do that.

In B2B, most businesses run on credit. In rough times, the first thing most buyers do is squeeze suppliers, unless they are critical to their business. Finding ways to address positive cash flow is the key to managing growth in difficult years.

Start a process to get pending payments, without antagonising them. Use factorial services if needed, or offer some incentives for timely clearance of invoices. Secure a moratorium and interest freeze from bankers for a limited period to get your act together. It is critical to be aware of your cash situation at any point in time during a crisis.