Ways for Company to Survive During the Pandemic

As the Covid-19 pandemic continues to hit the global economy, businesses aren’t seeing a bright future in the short term. Many businesses that once dominated the industries did not survive the pandemic and had to close their business for good. For small companies, the same unfortunate fate has befallen them as well. This unideal situation has created a lot of unemployment and a sickly economic ecosystem in the country.

I too experienced this unfavourable condition in Indonesia. Working at an office service provider company, I have seen a steep drop in demand for the past two years. In Jakarta, the decline of the business condition did not start from the pandemic. 2019 was quite a tumultuous political year filled with protest and violent demonstration. This situation has caused uncertainties for investors and has rocked the business situation. Many entrepreneurs had hoped 2020 would be better, but alas, Covid-19 came.

I have seen many of our clients slowly downgrade their services with us or at the extreme closed down their business. They complained that their business troubles stem from the difficulties with exports and imports, the lack of customers, as well as the lack of support from the government. In Indonesia, the local government support is mostly extended to micro-businesses or UMKM only.

The aforementioned regulation has caused a lot of businesses in the service sector to suffer from permanent damages. Without proper government support and with the slow vaccine administration, more businesses are put at risk. Causing more businesses to close down their operations. Therefore, it is fundamental to find ways for the company to survive.

For companies, there are two basic ways to survive the pandemic. They can either cut costs or increase profit. The latter might be less likely as the business environment is currently less than ideal. Thus, it is recommended for companies to opt for the first option.

Here are the lists of possible ways to cut operational costs:

- Pay Cut

Due to the lack of income, companies could implement a pay cut for all members of the company. The pay cut can range from 10 % to 70% depending on the company financial situation. Although it’s not the best option for employee retention nor motivation, it may be necessary to keep the company afloat.

- Decrease the Number of Employees

Another way is to decrease the number of employees. However, this strategy may not be suitable for all sorts of companies. The company must make sure that its operations can run smoothly with fewer team members. Similar to the previous option, decreasing employees may not fare well with employee retention and motivation.

- Digitalize your Operations

Make use of the internet and the rapid growth of technology by utilizing them for business operations. Companies can cut entertainment cost by utilizing online meetings. Moreover, by implementing work from home companies can also save transportation costs for employees.

- Use Virtual Office or Private Office

Renting a virtual office allows the company to keep a prestigious office address while the team works from home. The company do not need a physical office to operate their business. As for the private office, companies can save on receptionists, cleaners, building maintenance fee, and service fee while maintaining a physical office suite in a prestigious office location.

- Streamline Production

For companies that focus on production, streamlining their process can be very helpful. The simplest ways of doing it are by implementing kaizen. Companies must be aware to keep their level of inventory as well. Immovable assets, if unable to be converted to cash for a long period may pose as a hurdle for the company’s cash flow.

Those ways may not be easy but if successfully implemented, it may save the company. Point 1 and 2 may be challenging. Some may feel uncomfortable putting others in a difficult position, especially knowing that the consequences may cause the other party to suffer. If that is the case, then I recommend implementing point 3,4, and 5 first. If all else fail, then it is time to consider pay cut and downsizing the team member.