Sustaining A Business During & After This Crisis

Hey Jessientrepreneurs

It's no secret small businesses will and are feeling the pinch of this global crisis, myself included. Macro events such as these are often not thought of or prepared for and as the lockdowns and disruptions continue each day we'll see more businesses pushed towards and past their brink. Small businesses rely on larger businesses for income or they rely on consumers who have jobs at larger businesses to support them.

As small businesses close they leave gaps for other small businesses to grow or for consolidation by bigger companies which will be more likely as bigger companies are fist to access the new injection fo capital from stimulus projects and banks willing to lend based on collateral.

Image source: - thesmallbusinesssite.co.za

Banks stand to benefit big time

Banks and certain so-called too big to fail companies will be bailed out and saved from their negligence at the expense of the actual productive economy which is small business. Banks will be issuing out loans of which they will have to pay 0 interest on and lend it out to businesses.

Or take over distressed assets and sell it to other corporations for cash. This new money will create a bigger wealth divide and while some small business will have to take them or die, it's a horrible deal for the startup.

Selling out to the banks or competitors

If small businesses want to survive, they need to turn to become as lean as possible without compromising on their product or service. They may need to inject personal capital, they may need to borrow from family or raise money from non-traditional financial institutions.

If not they will either be working for the bank, which makes it no better than working for a boss and paying some bankers salary while you slave away.

Small businesses will also need to look to secure contracts with corporates and larger businesses who would be bailed out or government contracts. This way you can almost guarantee your income and run while you absorb the clients your competitors leave behind as they cannot meet operating costs.

It's going to be tough, and people are going to have to make painful decisions like letting staff go, letting the property go for cheap, leasing equipment instead of owning it, combining with competitors or friends businesses to cut costs.

Businesses that are small have the ability to be agile and make decisions that may seem unconventional but pay the bills. This situation is going to push entrepreneurs into uncomfortable positions and only the well-capitalized or agile will survive.

My only hope is that some of these startups are forced into creating creative solutions that are able to scale fast and help support job creation and other economic activity, we're going to need it.

This will NOT be a V shape recovery, it's going to be slow and painful, we're all going to have to realise, that the world has changed, the rules have changed and the way we operate will need to change.

Have your say

What do you good people of STEEM think? Have you met or known a millionaire that has lost it all?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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