Startups, SME’s and Covid-19

Any business that has been running for 5 years or less is considered a startup. Unfortunately, many startup attempts are unsuccessful. Statistically, about 25% of small businesses fail to thrive within the first year and the main reason is merely lack of demand. It is very challenging to start a new venture, let alone build an enterprise from scratch, even a small one; but this is exactly what we’ve done and we were able to pass the first grueling year which was very crucial.

This is our second year of running a bona fide business . I started the business as an online shop with no personnel but myself. It was a one-man-team but it was very profitable given that the overhead was very minimal. One day I just decided to expand; to explore broader horizons. Now, after almost 4 years and being out there for almost 2 (because we only opened our first physical shop 2 years ago), we are yet again facing a huge challenge that could either break or make us. I would say “make us” in the sense that if we’d survive this, we would probably survive other serious business threats.

Our main office with our 2 companies, both startups.

In February, the first Covid-19 case was confirmed in our country. After a couple of weeks, the first death (Patient # 2) that occurred outside of China was recorded in Manila and Patient # 1 was released simultaneously. After these 2 cases, weeks passed and we thought we’ve been cleared of the controversial virus.

On March 6, 2020, 2 cases were confirmed and 23 were investigated. A few days after, the cases multiplied and on March 15, the President placed Manila under community quarantine. This was  on a Sunday and the following day, Monday, the new system was tested and it was actually somewhat disappointing. Commuters were thoroughly checked at some areas but there were places where they just let anyone pass through the checkpoints. It was very hard to commute, there was an obvious shortage of public vehicles and the people were all wary, pissed and anxious. Many debated against the quarantine as they still wanted to go to work, especially those who are “Rank and File” employees and are getting paid according to the days they’ve actually come to work. (No work, no pay). This actually took place earlier today. I am writing this article hours after the President announced quarantine for the entire island of Luzon after deliberating that not much can be achieved with a partial quarantine and that it’s definitely unworkable; and that they are actually wasting effort and time trying to contain the virus when people are still out there, exposing themselves to the crowd that is the working troupe of Metro Manila where the contagion started. A few hours prior, the governor of our province, Cavite (this is located just beside Manila) announced a community quarantine for the whole province, before the President’s dreaded Covid-19 speech (this is actually his second speech in 3 days) which I think won’t be the last.  Community quarantine means no mass gatherings, no public transportation, restaurants are not to accept dine-in (take-outs and deliveries are still allowed though), malls are closed and the community parks and basketball courts are all shut down. As of this moment, it’s March 16, 2020, just 10 days after 2 people were tested positive, the official number of cases is 140 with 12 deaths recorded.

Total number of cases as of March 16, 2020.

Amidst all these, I have decided to continue partial operations. We are to go to work from Mondays thru Wednesdays and stay at home the rest of the week. But even that isn’t as definite anymore as they have completely banned all public transportation. We are on the process of deciding what steps to take next. As a startup, we are still working on our cashflow and even before all these, when there were no virus threats yet, we couldn’t say that we were as steady as we wanted to be.

I always tell my employees that we are like the stone-bullet on a slingshot ready to be released. We are a few steps prior to liberation. We have sacrificed so much for the business to be on this state. We didn’t really have a strong funding system for our capital and we’ve actually worked hard to be where we are now. And I’m talking about not just hard work as it is. We have come this far because of courage, sacrifices, faith and strong work ethics.  We have invested so much time, energy, sweat and tears for the business to survive despite stiff competition, lack of working capital and resources, after-sales problems that seem to not end and a lot of other things. These stumbling blocks didn’t keep us from moving forward, even if there were days that we were fairly close to throwing in the towel.

Meeting with the team.

Now, our business is on the verge of bankruptcy. Our sales went down rapidly. I am anticipating, it’s just a matter of time before our working capital run dry. As a new player, we don’t have much reserve. Everything is being rolled and we always have to have a steady cashflow for us to be able to continue our operations. And this is not just happening to us. A lot of small and medium businesses are probably experiencing the same problems.

In moments like this, I am choosing to let my values support me and I am still looking at my main goal. I started this business with a definite goal in mind and that’s where I’m still looking at. I will share some of the measures that we have taken so far as to survive this grueling time and the things that I did and am planning to do to make use of the downtime.

  • We did not panic. In a situation such as this, one has to stay focus. But how does one do this? My secret into effective problem solving is to approach the problem logically. Once you’ve been affected emotionally, you won’t be able to think clearly and you’d see the problem at a more complex state than it usually is. The first thing that I do is to write down what the exact issue is. Once you’ve written down something, your brain would tell you that the problem is something that can be solved logically. You are actually distancing yourself from the problem. You become an outsider, an observer. And you’d be able to cut any emotional attachments that you may have with your problem. Your mind would automatically think that this is just another task that needed to be accomplished, just another item on your checklist. With this, I actually got myself drawing pads/notebooks (A4 in size). I use this when something is bothering me and I would want to really sit down and play with solutions. I doodle on the pad; I sometimes draw; I create graphs. As with all the other difficulties that we’ve encountered, I wrote this one down and enumerate scenarios and solutions. I also made computations on our finances. I have written down all possible scenarios and steps to take with each scenario. I wrote down every possibilities. This way, I was able to think clearly and organize my thoughts. After spending at least 2 hours visualizing every scenario I could think of, I was able to think of solutions, contingency plans and proper budget allocation.
  • We made use of what we still have and what we can still do. Limited as it is, there’s still business that we can do. We made a list of people that we can still do business with, customers in areas that are still not affected (though this is a bit of challenging now because of mobility issues); people assigned in production can still come to work provided that they won’t have to use public transportation (applicable to people who live near our work area), employees can still report 3x a week (though we are not sure if we can still do this in the next couple of weeks; it will depend on the government if they are still going to allow it) , and we continued answering inquiries online. We are closing deals the best way we can, we are giving discounts to future clients and we are encouraging online transactions and deliveries. About the company’s budget, we’d be able to cut down by trimming down the working days and we are just planning to give our employees food supply on days that they are not paid.
  • Make use of downtime. We all have things that we want to do but because of our busy schedule, we always put them off. Most of these things are actually those that are for self-improvement. For me it would be writing a blog and finishing my book (things that I am actually doing now), reading more and strategizing for our business and life in general. These things could actually help you evolve and once the Covid-19 virus threat is gone, you’d be able to apply what you have learned, make profit from what you have accomplished and add value to your business and your life in general.
  • Read. Read. Read. To acquire knowledge, aside from experience, I would say reading is the next best thing there is. I have ordered books before but I can’t find the time to read them. These books are mostly about business, the human brain and leadership. I would say not just I, but the people that I am working with and the business would benefit from all the understanding I could get from these books.
  • Bond with your family. With our busy schedule, we always tend to give very limited time and attention to our family. We bond with our children only on weekends and we talk to our spouses hurriedly before we go to work or just before going to sleep when we are already exhausted and dozy. Take advantage of these moments when we can really get to know our teenage kids, when we can rekindle our romance with our spouses and when we can really connect and be present with our family.

We are all well aware that this catastrophe is not ending soon. Manila is going to be on lock down until April 14. For now, our focus is survival; to be able to determine the best strategy to save the business; to save and make use of what little we have; to provide support to our employees and to be able to help in the event that our country will need our services as its citizens. For now, there’s not much that we can do. We can only make use of the time that was given to us; precious time that we didn’t want to waste whining, blaming and feeling sorry for ourselves. And as they always say, as with all the drawbacks that one may encounter in life, this too shall pass.

Daanghari Road on March 18, 1 day after the government announced lock down.

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