NEW WORLD, NEW RISK
The year 2020 saw a tremendous shift in the business world and almost every industry across the globe was affected. While businesses often expect to be affected by waves of economic recession, part of the challenge this time is the fact that the pandemic has lasted much longer than what many businesses are normally used to in an economic crisis. Businesses were at the point of decimation, with many ending up shutting their doors due to the coronavirus pandemic. While some may never reopen, others are ramping up their business hoping that they do not have to shut down. The outbreak has forced business owners to reengineer their business plans as the traditional manner of conducting business is becoming more and more irrelevant. The spread of COVID-19 has brought a great deal of uncertainty to our world, and it certainly has not been easy for business owners.
In this article, the Karyawan team met four business owners in Singapore to learn about their challenges, how they are navigating this unchartered territory, and the invaluable but painful lessons learned during these very challenging times. While quite diverse and all serving different consumer bases, the four business owners interviewed in this article all reflect the realities the business community is struggling with during this unprecedented disruption.
Here are a few lessons we can learn from them.
1. Diversify and Enhance Company Branding
After the pandemic, many businesses have realised that they cannot rely heavily on one source of business as it makes them vulnerable. Some businesses have had no choice but to find new ways to generate revenue, when lockdowns and quarantines rendered their original business plans impossible.
The 33-year-old founding director of Bubblehead Company Pte Ltd, who wishes to be identified Tosh, had to shift gears to navigate the pandemic’s bumpy road and to handle what lies ahead. As a motorcycle and lifestyle company, Tosh provides motorcycle-related services including custom services and bike detailing. He shared that the automotive industry was not spared from the shock of the COVID-19 crisis. Sales were weak, especially with the implemented regulations. Even when restrictions were lifted, consumers were still forgoing services because of concerns of physical contact with others. In addition, many consumers are now focusing on spending less and saving more.
“The pandemic has been very disruptive to my business entirely. It has forced me to re-strategise the entire business model. For instance, during Phase I and II, there were restrictions on how we were able to run our business. I know we will not be expecting to see the usual number of customers we were getting pre-pandemic. Despite getting approval to operate for ‘essential services only’, the shop was still empty on most days due to the restrictions and regulations on social distancing. Business was almost zero from day to day,” Tosh shared.
Through the pandemic, Tosh saw the need to devise novel solutions and improvise existing ones to make the best of the evolving situation. The pandemic had forced him to accelerate his initial plans to diversify his business so that his sales were not coming from one specific customer base. Although he had to close his barber shop and leather workshop, which were operating pre-pandemic, he has since diversified his business to offer apparel, LAN gaming, and also opened an art studio after the pandemic happened.
“There is a need for multiple back-up plans, be it small or big. It is essential in order for the business to survive and fight on,” Tosh shared.
If there is one thing this current crisis has taught him, it’s not to put all your eggs in one basket. According to him, it is imperative to have several income streams and a diverse customer base so that if something happens to one ‘basket’, you still have other ‘baskets’. Diversification brings security and stability to your businesses.
Tosh shared that he also worked towards upgrading himself and his business professionally by getting accreditation during the pandemic to increase his business competitive edge and improve the business’ branding so that his current and potential customers can place their trust in his brand.
“When my business was not doing well and I did not have many customers during the pandemic, I used the time positively to upgrade the shop, the brand, and even myself. I bought another unit to accommodate my expansion plans and renovated my shops to make them look more aesthetically pleasing. I also worked hard to get my company BizSAFE Level 3 certified to assure my customers that my services are delivered by staff who work in a safe and healthy environment, as well as to improve my company’s corporate branding,”
In fact, despite a rough year, Tosh shared that his company has been awarded the prestigious commercial status of a Singapore 500 SME company for the work year 2021-2022.
2. Digitalisation is the Trump Card
Perhaps the most important lesson the pandemic taught businesses is the need for digitalisation and how it helps in building agility and a quick response to the unexpected. While this digitalisation drive is not new, the pandemic has accelerated the paradigm shift towards digitisation, making those affected scrambling to migrate their operations to a virtual environment to stay above water. Physical touch points have been converted into digital touch points and today, online
presence is essential for any provider. Digital tools and virtual collaborative platforms have created a new framework of processes.
Naturally, one of the worst affected by the pandemic was the events industry. In an effort to slow down the spread of the virus, the pandemic saw the cancellation of many prominent festivals, sporting events, exhibitions, concerts, and even private events such as weddings. Many event industry leaders had to quickly shift their events from physical to virtual because, despite mass cancellations of events due to COVID-19, the appetite for organising events during the pandemic remained high.
As Mirza Shah, 21, director of Studio D Event Production shared,
“During this pandemic, our business has faced a lot of challenges like transitioning into a virtual setup. Instead of doing a lot of outdoor events, we have to plan and restructure our operations. We are still running and sustaining the company, but we definitely have to deal with difficult choices to keep the income coming.”
As an event-based business dealing with the audio-visual and lighting systems, and supporting everything that a physical event needs, Shah, who is currently undertaking a diploma in audio production, was nevertheless quick to react to the unanticipated challenge. To deal with changing customer behaviour brought on by the pandemic, Shah had to reallocate his resources to build a better digital interface. He shared that he immediately started engaging with their clients to shift their events to the digital realm.
“We have had to accommodate to the COVID-19 measures and comply with the needs and wants of our clients, which include changing some systems to virtual ones and investing in new equipment for virtual setups,” Shah said.
While the process of pivoting to the virtual space has been challenging, Shah realised that going virtual has uncovered opportunities for change and growth.
“We have discovered many digital aspects of the business, especially live-streaming events. We approached business coaches for guidance to sustain the business. We also have a crisis plan that we have to switch to, which may cause us to lose some income, but still be able to sustain the business,” Shah said.
3. Do More with Less
The pandemic has also forced some business owners to look more closely at their numbers and learn to do more with less, in times of uncertainty. In fact, despite a rough year, Tosh shared that his company has been awarded the prestigious commercial status of a Singapore 500 SME company for the work year 2021-2022.
Nur Muhammad Hidayat, 35, director of a media company called 2fly Production Pte Ltd, shared that besides equipping and transforming their office space into a digital-ready space, tightening budgets and cutting down costs where necessary were critical for his business to sustain.
“We had to make difficult decisions like temporarily suspending our business and relying on just the two directors as full-time staff to ensure the company kept moving forward. I believe cutting down on manpower costs and shifting our business operation were the toughest decisions we had to make,” he said.
Hidayat shared that his company started out as a wedding photography and video service provider but eventually ventured into the world of corporate videos, advertisements, as well as creative-commissioned works a few years later. He shared that cutting down costs has helped him sustain ongoing operations and facilitate recovery, albeit at a lower capacity.
“Apart from being adaptable and being open-minded, I strongly believe that knowing when to cut losses are as important. This pandemic has taught me that if I value my ego more than what the reality is, I would never have survived up till now. I think knowing when to take a step back to refocus is important. So, always take time to take a step back and refocus and never be ashamed to cut your losses,” Hidayat added.
Hidayat who has been involved in the media and arts industry for over ten years now shared that he is still learning to cope with the impact that the pandemic has caused.
“The challenges it presents are unique, so playing by ear and always keeping up-to-date with the changes in regulations were important. Personally, I have joined various Facebook groups where I immerse myself in healthy discussions and threads about how fellow creatives are handling their challenges and tackling the impact,” Hidayat shared.
“I did not approach anyone for help. I personally do not know how to ask for help for matters that are really beyond anyone’s control, such as job cancellation. The experience has, however, taught me to always have a crisis plan. The thought-provoking questions presented in this interview have also led me to reflect on these challenging times,” he added.
4. Seize New Business Opportunities during Adversity
Before the pandemic, many businesses relied on big social events to generate revenue. These businesses found themselves behind the curve when the pandemic hit because these traditional lead sources were compromised.
Food caterers were among those battered significantly by the pandemic because their strength is in doing food receptions at a large scale. Their bread-and-butter events like weddings remain cancelled, postponed, or scaled down, in line with crowd-limiting safety protocols.
The 33-year-old owner of Briyani Catering Pte Ltd, who wishes to be identified as Muhyideen, was among those who were greatly hit. Previously a police officer, Muhyideen left his job to venture into his own business.
“2019 was promising and we secured a few leads for 2020. However, due to the pandemic, our events were mostly cancelled, and others were downsized significantly.
Challenges include suppliers increasing their prices which left us in a dilemma, deciding if we should impose the price hike on the customers. Large-scale weddings were also changed to small intimate weddings and the cost incurred was higher. We had to refund our clients and had to open small orders to get through the month. Of course, the profit margin was so much lesser,” Muhyiddeen said.
Muhyiddeen, whose business focus was in serving authentic dum briyani for weddings, shared that unlike many other businesses which could move their services online, holding a digital wedding would not address his problem.
“In fact, when weddings went online, we lost even more as there were fewer orders. We did suggest delivering food to clients’ houses instead, and although the idea was accepted, many were reluctant to pay the delivery fee,” he shared.
After struggling to stay afloat and having even considered closing his business, Muhyiddeen, who started his business in 2018, decided to hang on and look for new opportunities. That was when he pivoted to selling murukku. He realised that to ensure business continuity, it was crucial for him to realise the fluctuating market of the catering industry and to seize the new opportunity when it came despite dealing with adversities.
“We had to continue hustling amid the pandemic. A friend called to ask if we could accept a corporate order for Deepavali snacks. Thanks to that, we have now ventured into Indian snacks. Currently, we are one of the murukku distributors in Singapore. Unlike the rest, our target market is not only the Indians, but Malays and Chinese too. We designed our product to appeal to everyone,” he shared.
Muhyiddeen’s response to grab new opportunities during adversities has kept his business humming. His advice to other business owners who are struggling, “Always have a backup plan, never give up, and have a strong support system.”
5. Be a Decisive Risk-Taker
Risk taking is inherent in entrepreneurship, but as our interviewees shared, the key takeaway from the pandemic is to also be swift at it. Accelerated strategic planning, processes streamlined for speed and efficiency, and quick execution are what sets you apart from the rest.
“The media industry moves very fast – what’s in trend today may no longer be in trend tomorrow; therefore, it is always crucial for us to be ever ready and time-efficient in executing our projects and plans,” Hidayat shared.
Tosh shared similar sentiments when it comes to swift risk-taking in business. Having worked as a licensed aircraft engineer for over 12 years before jumping onto the entrepreneur bandwagon, he is no stranger to making high risk decisions. He shared that, like the aviation industry, it is imperative to make prompt and risky decisions in business in order to succeed.
“I did not only have to make difficult choices. I had to make high-risk ones. The decisions could either help the business recover, or I could lose everything at once. My advice is to never lose hope and run business as usual. You just need to work extra hard,” Tosh said.
Our interviewees all took a leap of faith by taking the risk to revamp their business plans. As company leaders, they shared that they have a responsibility to do their best to ensure that their company survives. Risk-taking is inevitable in business. As a matter of fact, avoiding risk might even lead to missed opportunities. As our interviewees have demonstrated, difficult times are the best times to take a risk because unlike good times, the risk is the same, but the reward is much greater.
THE ROAD AHEAD
As the coronavirus situation continues to unfold, one thing is clear. These business owners are on the frontlines of the fight against the pandemic, exemplifying exceptional agility and innovation to stay alive.
We can expect a bumpy ride ahead with uneven and weaker economic growth, coupled with increased global uncertainties as we battle the invisible and persistent enemy. The pandemic is proving to be a catalyst for change and has forced companies to face the facts – all hands on deck are needed to be able to weather this major, unforeseen disruption. Rapid change of the sort we have seen will only continue, and the ability to evolve in the face of such changes will be integral to the success of businesses. Some changes have been radical, others more subtle and nuanced, and business owners are spending every day rethinking and fine-tuning their strategies.
For most companies, it won’t be back to business as usual. Those who get it right will survive and even succeed but there is little room for complacency in the near term. It is thus important to learn from the pandemic and embrace new ways of thinking so that we are better equipped to deal with future scenarios.
These lessons can be hard to learn, and in some cases, even harder to implement. The pandemic is a wake-up call for many business owners. As illustrated by our interviewees, the challenges posed by the pandemic have highlighted the importance of recognising one’s business strengths and weaknesses, as well as identifying and mitigating risk. The future of business lies not in the formulas of the past, but rather in the relevance of moving forward. If nothing else, COVID-19 has shown business owners like our interviewees, how resilient and adaptable humans are as a society when forced to change.
Indeed, lives come first during these tough times, but livelihoods also matter. ⬛
Nabilah Mohammad is a Senior Research Analyst at the Centre for Research on Islamic and Malay Affairs (RIMA). She holds a Bachelor of Science in Psychology and a Specialist Diploma in Statistics and Data Mining.