In August 20120, the Ministry of Trade and Industry (MIT) narrowed Singapore’s GDP growth forecast for 2020 from “-7.0 to -4.0 per cent” to “-7.0 to -5.0 per cent”. In the second quarter alone, the economy contracted by 13.1 per cent, which was a 0.8 per cent fall from the first quarter of the year.
This economy contraction is expected to continue as the country continues to implement Circuit Breaker (CB) measures, with international trade proceeding with extra caution.
As such, many companies are forced to cut back on their operations as well as their workforce as they navigate through the pandemic. COVID19 or otherwise, it’s best to be equipped with strategies to best survive a slow economy. Below are a few actions businesses can consider when trying to survive a slow economy.
1. Tweak Your Operations
If there’s one thing that can squeeze the cost margin is to first and foremost reduce the cost associated with the production of the goods and service. Have a look at the operational process and determine what are some of the areas you can remove and the areas that can be fully automated. Opt for online solutions such as accounting and inventory management. If push comes to shove, you may need to replace your workers with these automated solutions, allowing you to save more on workforce costs. This may also be accompanied with the shift to a small space for rent now that your workforce has shrunk.
2. Communicate With Your Team
With a drastic change in the management and operations, it’s crucial that you relay these changes to your employees. Be sure to be transparent and communicate the company’s current performance, current financial position and the next plan in dealing with the contracting economy. Giving them a heads up won’t only allow them to register and prepare for the following changes, but it will also help to boost morale as communicating such changes shows that the company is not only reliable, but also one with integrity.
3. Ensure That Your Brand Is Not Forgotten
In a slowing economy, especially where physical operations are likely to be limited or ceased altogether, it’s important that you keep in touch with your prospective customers. It may not translate to immediate sales, but when the economy restarts, you’ll want to be at the top of their calling list if they wish to engage a business with similar products or services similar to yours.
You can do this with advertising or increase online brand awareness. Look into relocating your financial capital into securing brand awareness and brand trust for long-term success.
4. Management Of Cash Flow
With a slow economy, expect the total revenue to decline and it may be challenging trying to scour deals and transactions. As the banks shrink their lending, you’d want to take a hard look at your financial capital and cash flow forecast to figure out what your next steps are. Are you stretching each and every dollar or should you invest in the product or services that offer the most profit margin?
Ensure that you have several roadmaps and alternatives when figuring out how’d you manage your cash flow from here on out, so that it supports the other plan.
At Greenhub Singapore, we strive to be part of your business’s survival and growth by offering you a conducive and green office space for lease at an affordable rate. Should you wish to cut your costs even further, we also offer virtual offices that allow you to operate your business without the cost of a physical space! Survive the slow economy with Greenhub Singapore!