Business experts speak to Zubair SEC on how SMEs can adapt and evolve in COVID-19 environment

MUSCAT: In a series of digital interviews, business experts and partners of Zubair Small Enterprises Centre (Zubair SEC), along with the Centre’s own advisory team, have urged SMEs to face the COVID-19 situation with a positive attitude and take needed action to stay afloat.

Sharing their insights to help entrepreneurs and local businesses ride out the storm, they encouraged them to ‘keep faith’, ‘maintain financial discipline’, ‘embrace innovation’, and ‘go digital’ whenever applicable. They encouraged SMEs to prepare business continuity plans, and if necessary, make changes in the way they need to conduct business.

Remarking on how to handle current challenges, Abdulaziz Al Balushi, Group CEO, OMINVEST said, “These are indeed unprecedented times. Here in Oman we are facing a twin crisis – one of COVID-19 and the other one is that of oil prices. However, I have no doubt that we will come out stronger by mainly helping each other. At this critical moment, I believe we must help SMEs to navigate through these difficult times. It is important for SMEs to effectively engage with all their shareholders and build trust with them.”

Emphasising that SMEs must have financial discipline, Abdulaziz Al Balushi said, “We need to cut unnecessary expenses. Every penny that is earned or saved will make a lot of difference.” He reminded SMEs who are financially and operationally strong that this is the time for them to grow.  Advising SMEs to do more for less, he asked them to embrace technology, commenting, “that is the only way forward. If we think about innovation let us think how we can innovate through technology.” Abdulaziz Al Balushi asked SMEs to revisit their business plan. He said, “The lessons we learnt in this crisis will help us redefine our business strategy. For us to be relevant in the future, it is important that we reconsider the way we do our businesses. Please have faith and hope and inshallah we will come out of this stage stronger.”

OMINVEST has been supporting Zubair SEC’s flagship Direct Support Programme (DSP) for the three yearly rounds.

Saying that the COVID-19 has disrupted the complete SME ecosystem, Pankaj Khimji, Director, Khimji Ramdas LLC, said, “This sector has taken a massive hit as has the other sectors. We must remember that SMEs is an ancillary industry, a service provider to a major cluster. SMEs will survive only if there is an ecosystem which is providing them a so called ‘feed’ to grow on.” Pankaj Khimji explained that SMEs who are hit badly are the ones who have large ‘ongoing fixed overheads’ such a rent or those invested on a vehicle which is a ‘non- productive cost’. He suggested permission from authorities to operate from home or garages or outsourcing the transport of delivery systems is certain to help young entrepreneurs.

He advised SMEs who have borrowed loans to go upfront to the banks or lenders ask them for a furlough in paying interest. “If you need more loans don’t borrow more than you require. Be frank with your bankers because they have been given an unofficial mandate by the CBO and the government to help SMEs. Please get in touch with your electricity or water provider because they will also give a deferment on their payment.”

Suggesting to large corporates to start a ‘mentoring and monitoring’ programme for SMEs, Pankaj Khimji said, “We could work with them and talk to landlords to defer rents. Large corporates can lend their warehouses for the time being. Large organisations or icons of Oman must have a plan to outsource non-core part of their business to efficient SMEs or cultivate them to make them efficient and give them a cost beneficial and win-win proposition. Businesses should be aware of how many small businesses they have helped mushroom.”

Commenting on adjusting and using opportunities, Humayun Kabir, Chief Executive Officer at ABQ Education Group said, “We live in unprecedented times and face challenges we could never really plan for. SMEs should try to out adapt and out innovate our competitors and delight our customers.” Offering useful tips to budding entrepreneurs, Humayun Kabir urged them to keep the faith. He said, “The idea that inspired you to become an entrepreneur is still valid. You just need to adjust and adapt as to how you execute it.”

He further added, “Your advantage is speed and flexibility of execution. This is where you could make bold decisions, modify varied proposition a lot faster than many of your competitors.” Imploring them to exceed customer expectation, Humayun Kabir reminded, “An opportunity to exceed customer expectation is much better in a crisis because clients expect less. Besides, any business that goes the extra mile will get noticed and strengthen its customer loyalty.”

Stressing on the importance of financial discipline, Humayun Kabir said, “As you all know liquidity is at a premium in current time so keep a close eye on every rial you spend. Ensure that your funding provider understands your situation and the responsible actions you are taking.” Asking them to think outside the box, Humayun Kabir reiterated that technology is a big enabler of business process change.  He said, “Embrace it as much as you can to get closer to your customers or deliver to a better product at a faster pace or in a more convenient manner.”

Speaking on the importance of learning and self-development during crisis, Prof. Yusra Mouzugh, Vice Chancellor of Muscat University said, “COVID -19 is a difficult reality that has cast a shadow on our lives and changed our world completely. Successful institutions are the ones who deal with the situation with positivity. Investing at this stage is important; we can face the future in a stronger and better way. I believe one of the most important measures to combat this pandemic is to invest in continuous learning. I would advise SMEs to look for new tools to help them and their staff keep learning and developing important skills at this time.”

Elucidating on how businesses can respond to COVID-19, Dr Rashid Al Balushi, Managing Director, Iskan Oman Investment Company said, “The pandemic has forced small and large companies to rethink their strategies. The slowdown of economic movement and the freezing of activities such as aviation, hotels, and restaurants has led to disruption. I would guide SMEs to be ready with measures to come out of the situation. The most important of which is a careful review of all financial matters, especially the availability of cash liquidity in order to review financial obligations and entitlements, negotiate with banks and creditors to document the financial situation in a manner that is suitable for the availability of cash liquidity, as well as negotiate with suppliers to schedule payments and work to improve non-received revenue in addition to working to reduce operating expenses for the coming months and write off all non-core debt and maintain liquidity within the company.”

Articulating on how a company can cope with this crisis Martin Luxemburg, Managing Director of Erasmus Centre for Entrepreneurship (ECE) asked SMEs to, “Stay connected to your customer. Go to them, talk to them and ask them what their needs are. It is possible that their needs have changed, so you have to make sure that you are still able to support them.”

Zubair SEC and ECE have collaborated on an empirical research back in 2017 that also resulted in the development of an SME Support Ecosystem mapping for Oman.

Luxemburg asked entrepreneurs to check how they can make small changes that can add value to customers. “SMEs can offer certain things online or may be offer new products for which maybe they didn’t have time to develop before.”

Urging SMEs not to forget their employees Luxemburg said, “They are the biggest value that you have in your company and you need to have them to deliver that value to your customer. So, ask them how they are doing and what you can do to provide them with the support they need. Remember every company is different so you need a different strategy.”

Speaking on the importance of research and development to prepare for post COVID-19, Ali Shaker, Advisor, Business Development and Strategic Partnerships, Zubair SEC said, “While everyone’s primary focus is on how to perform better, it is important that research and product get management attention. With the future market and customer demand unclear, it is important to focus on R&D too. Ultimately, the world will return to some modicum of normalcy, and businesses should take steps with R&D so they are ready with plans.”

To support its members and other SMEs, the centre has uploaded around nine video interviews conducted with business leaders and key partners on the ZubairSEC’s YouTube channel. Around six interviews with members of the centre have been uploaded where they are sharing their journey through COVID-19.

Zubair SEC has been making continuous efforts to create dialogue around best ways to assist and extend advice to SMEs. Recently, the centre supported the SME community by holding virtual Tajribati sessions to discuss measures and steps the SME sector must take to prepare for the post COVID-19 world. Specialists at Zubair SEC have been continually helping by focusing on special measures to enable business continuity and assist members in preparing the grounds for recovery while looking for new opportunities.

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