在现今社会里，有钱是霸道，懂得管理钱是王道，懂得在经济危机里赚钱是终极之道！
Everyone has been talking cash is King but if you do not know how to manage cash then your cash will become “KONG” without you knowing.
I believe most Malaysians especially SME owners are in deep dilemma now following the out of sudden announcement by Malaysian government on Labour day (1 May 2020) that 80% of public and private sectors including social activities are allowed to reopen/resume business on 4 May 2020.
This has given most SME owners no choice but to react, plan read and swallow every single word in the SOP. SMEs who wish to resume business now have to spend money on buying personal protection equipment and hiring disinfection services which the price hike due to high demand.
Business owners are all furious and could not even sleep well, feeling anxious on what is going to happen when business resumes. If you are one of them, please do read on.
Dear business owners, if you are still indecisive whether to resume business before the MCO is lifted or you are struggling with your cash flows which buying personal protection equipment and related cost is a big burden to you at this moment, please CALM DOWN and spend some quality time to plan on ways to survive the crisis. Rushing to resume business and later suffer for bad consequences is not an option to your business.
We are in the same storm, the war to fight economy has just started and no one can tell when this war will be over!
These are a few tips on what you can do/ consider to do (wherever applicable):
1. Engage with your customer/ clients
Contact them to discuss on upcoming orders so that you have a sense of how your future revenue going to be, or what you can help them with, offer your help and at the same time can help your own business! And if there is any bad news, you would want to know now then later. We shall change our strategy by looking at return of investment AND return of relationship!
2. Engage with your suppliers
Of course, you need to engage with suppliers, if they can’t provide you with raw materials or trading goods, you cannot deliver to your customer as well!
3. Brand communication strategy (online and offline)
Keep your stakeholder updated and help those most in need without hidden agenda. Use brand power to help spread important message and share useful and important tools. These will help in building your brand awareness!
4. Assess the Financial Health of your company – i.e. How many months can your business sustain with reduced level of cash in hand.
- Do a simple cashflow projection for the next 6 months based on ‘Cash inflow’ and ‘Cash Outflow’ concept + Current Bank/ Cash balance
- Adjust your sales and direct cost accordingly based on your discussion with your customers and suppliers
- Adjust staff cost if there is any mutually agreed pay cut/ unpaid leaves
- Include all the monthly fixed recurring expenses (for. eg rental) and variable expenses
- Assess if you need additional funding from external parties or to cut unnecessary expenses
5. Reserve as much CASH as you can
- Talk to the banks/ financial institution for additional banking facilities (consider Special Relief Facility (SRF)/ All economic sectors (AES) facility/ micro-credit scheme etc)
- Be open to your employees on company’s financial situation and discuss on pay cut or alternative working arrangements (if required)
- Discuss with your landlord on reduced rental (and landlord gets to claim additional tax deduction for the reduced rental for 3 months (April to June 2020) if your company is a SME and the rental decrease 30% or more)
6. Make FULL use of government subsidies and available loan/ financing options
- Deferment of loan repayment & hire purchase instalments for six (6) months
- Convert your credit card balance into 3-years term loan
- Get SME 0% interest loan
- Deferment of tax instalments (3 months for SME and 6 months for tourism industry)/ revision of tax estimation in 3rd (to fill specific application form), 6th and 9th month
- Extension of filing deadline for final tax submission for assessment year 2019
- Wage subsidy Programme (WSP) / Employment Retention Programme (ERP)
- Deferment of EPF (Employers’ portion) payable for 3 months – (e-CAP)
- Apply for Prihatin Special Grant of RM3,000 (if your company is micro-SME company)
7. Future Business plans
For example, if you are in retail business, think of some great deals for your regular customers and some deal catch to attract new customers as well. Or take some time and look into digital marketing which might be one of the fastest ways to reach your potential customers!
