Businesses across the globe have endured a tough year so far. Some countries have imposed full lockdowns while others imposed strict control measures to tackle the coronavirus pandemic. In Singapore, all non-essential businesses had to shutter during the two-month circuit breaker to contain the spread of Covid-19.
Even as restrictions to economic and social activities are gradually eased in many parts of the world, secondary flare-ups of Covid-19 infections are forcing several nations to tighten control measures and impose fresh restrictions once again.
Until effective treatments or vaccines are in place, companies will continue to face stiff headwinds from the storm brought on by the global pandemic. The ebbs and flows of safe distancing measures and targeted quarantines have exposed businesses to unprecedented levels of uncertainty.
To navigate a highly unpredictable business environment, enterprises will need robust contingency plans that address factors such as:
- Salaries for retaining and supporting employees
- Cost of raw materials for manufacturing products
- Utility bills to keep the lights on
- Emergency funds to function as a safety net
While the pandemic situation is still in flux, businesses will also have to adopt new practices, such as providing face masks and gloves for workers and stepped-up cleaning and disinfection of their premises, to keep staff and customers safe.
Those that have not embraced digitisation will have to swiftly establish their e-payment and online commerce capabilities to adapt to the new normal. While these are worthy investments to ensure businesses can modernise and operate safely, they still present an immediate expense that must be borne.
These challenges boil down to a single one - keeping the cash flowing even while revenue has been diminished, or looks set to fluctuate for some time to come. Small and medium-sized enterprises (SMEs) typically have smaller cash reserves than large businesses to cushion the blow and thus less room to manoeuvre during the ongoing financial tempest.
One such SME - Economics at Tuitiongenius - usually relied on brick-and-mortar centres for new registrations, but this source was hit by the decline of foot traffic in the last few months. Fortunately, they have had an online learning infrastructure in place for the last two years, but still needed to ramp up their marketing presence and develop more digital content.
To take these steps, the business turned to the Temporary Bridging Loan Programme, which offered it a low-cost solution to stabilise operations as it seeks to find its footing amid this turbulent period.
With funds from the Temporary Bridging Loan, Economics at Tuitiongenius was able to hire staff with the skills to build up its online marketing ability and produce resources to take its lessons fully online. Today, over 50 per cent of its students attend their classes remotely to follow safe distancing guidelines.
Mr Eugene Toh, who has been running the centre for 13 years, is now hopeful that the improved teaching material and marketing reach will enable the business to expand when the economy eventually picks up.
"Debt is often not seen in a positive light, but from both an economics and business perspective, it is one of the tools that businesses can tap on to help them develop and expand capabilities for the future, given the low interest rates," he says.