As the COVID-19 pandemic continues to spread, the one thing that is clear now is how unclear we are on how long it will last.
If you haven't already, this is a crucial time for you to set the stage for a plan to protect your business and ensure business continuity.
Here, we outline steps you should take to position your business for success amidst this chaos and the available government resources to support you.
1. Health and Safety First
Whether you are a solopreneur or have people working with you, prioritise your health first.
First off, eliminate unnecessary commute and travel. The past year has taught us that physical offices were never a necessity, for the most part.
Maximise home office and online collaboration tools – Zoom, Skype, Teams, Google Meet and Slack your way into a safer environment for you and your team.
In case that's not attainable and your own an essential business, take steps to limit the virus transmission. Measures would include reduced workforce, temperature checking, and physical distancing.
2. Evaluate your finances
For most of us, the pandemic is giving severe financial impacts. To ensure your business can continue to stay afloat, you should find opportunities to reduce non-essential expenditure.
Also, assess any credit risks as your partners may also be facing a financial situation.
At this point, you should have plans for a safety net. Be it in the form of savings or a business line of credit that you can draw from when necessary.
Mitigate further risks by evaluating expenses against revenue, re-strategising your business model and implementing new cost-savings measures.
3. Assess Operations and Production
How has the pandemic affected your business operations since?
How can you adapt to the ever-changing demands and regulations that come with each spike in the cases numbers?
Consider how a change in travel restrictions, for example, may impact your supply chain. Plan how these can be dealt with, either by managing your stocks or engaging a local supplier.
At the same time, consider your current products and services; are the demands for them changing or becoming obsolete? Strategise to adapt to these demands and also create new revenue streams.
4. Get Online
If you are not yet online, it's time to ride this bandwagon. There are multiple free and paid channels you can use to set up your business online nowadays.
Maximise channels like SEO and social media to engage with your customers.
Take your business online from end to end to ensure your business still has customer support during this pandemic.
5. Keep Communication Open
Ensure you keep open communication with all your employees, clients, partners, suppliers, investors, and other stakeholders.
It helps keep everyone feeling safe and secure about your business and their position within your company when they know how you handle the pandemic.
Within your team, ensure to establish new Standard Operating Procedures (SOPs) that makes it a must for them to inform if they feel unwell or have contacted someone who has contracted the coronavirus.
6. Adapt! Adapt! Adapt!
Channel the chameleon and adapt to whatever changes coming your way. Even your newly crafted 3-month plan might need revamping as you are implementing it in such uncertain times.
Especially with the ever-changing regulations with each spike in the COVID-19 cases locally. It will help if you have a best-case and worst-case scenario strategy for an extended period.
The end of 2020 saw hopeful statistics that may have led people to believe the workplace and business situation will be more comfortable but come 2021. We find ourselves in lockdown again.
Suppose the pandemic and lockdowns continue for the next few quarters; you will need another contingency plan.
7. Stay on top of available assistance
Ensure you are aware of and take advantage of all available support during these trying times.
On 18 January 2021, the Malaysian Government has introduced the Perlindungan Ekonomi dan Rakyat Malaysia (PERMAI) assistance package, valued at RM15 billion.
It has declared three objectives to help the nation during this pandemic.
We focus on the third objective, which is to support business continuity:
PERMAI Third Objective: Supporting The Business Continuity
The third objective comprises ten initiatives that can help support and protect your business.
The full text of the Prime Minister's speech on PERMAI is available here.
However, we have summarised the ten initiatives below for your easy referencing.
1. Improving the Wage Subsidy Program
You are eligible to apply for a one-month wage subsidy of RM600 for employees earning less than RM4,000 up to 500 employees.
When announced, this subsidy was applicable for states under a movement control order ('MCO states'), check updated information when making an application.
2. Continuing the Prihatin Special Grant
If you are operating an SME business, you can apply for this grant. You will be eligible for either RM500 or RM1000, depending on which state you are running your business.
3. Providing One-Off Financial Assistance to Taxi and Bus Drivers
You can take advantage of a once-off RM500 financial assistance if you are a tourist guide or operate a taxi, school bus, tour bus, rental car, or e-hailing vehicle.
4. Accelerating the Implementation of Microcredit Schemes
This acceleration includes RM1.0 billion in soft loans by Bank Simpanan Nasional, Agrobank and TEKUN, which you could apply for.
5. Supporting and Boosting Online Businesses
Through the acceleration of SME and Micro SME e-Commerce Campaign and Shop Malaysia Online Campaign, you can receive business coaching and on-boarding onto e-commerce platforms.
To encourage sales flowing into your business, buyers will enjoy savings through online shopping under this initiative.
6. Enhancing the Danajamin PRIHATIN Guarantee Scheme Enhancement of existing Danajamin PRIHATIN Guarantee Scheme amounting to RM50 billion
You can take advantage of the increased financing and expansion of the funding cope, which now covers working capital with a guarantee period of up to 10 years.
If you are a foreign-owned company, you are still allowed to participate in this scheme, provided that a minimum of 75% of your workforce are Malaysians.
7. Rescheduling and Extending the Moratorium Period for MARA Loans and MARA Premises Rental
As a MARA entrepreneur affected by COVID-19, you can apply for the MARA business financing rescheduling programme.
If you are renting under MARA, you can also benefit from a 30 per cent rental discount until April 2021
As a landlord, should you reduce your rental fee by at least 30% until 30 June 2021, you can enjoy a special tax deduction.
8. Continuing Electricity Bill Discounts
If your business falls under any of these six sectors: hotel operators, theme parks, convention centres, shopping malls, local airline offices, as well as travel and tour agencies, the Government will subside 10% of the electricity bill.
Do not fret if you do not fall under any of the above sectors. Tenaga Nasional Berhad (TNB) is still giving electricity rebates to all TNB users.
The rebate is equivalent to a reduction in electricity bills of up to 9 per cent for six months, from 1 January to 30 June 2021
9. Introducing a Bus and Taxi Hire Purchase Rehabilitation Scheme
As a bus or taxi operator, you could be eligible to have a 12-month moratorium and lower monthly repayments.
Syarikat Jaminan Pembiayaan Perniagaan will provide a 50% guarantee on financing from hire purchase and leasing companies for selected buses (such as tour buses) and taxis.
10. Extending the Temporary Measures for Reducing the Impact of COVID-19 Act 2020
Suppose your business is impacted in such a way that you are unable to perform your contractual obligations. In that case, you could be precluded from any legal action.
This is provided that your failure to perform is arising from any of the categories of contracts specified in the Schedule to the said Part II of the Act) to 31 March 2021.
Do check with a lawyer to confirm your obligations and exclusions.
Better Days Ahead
While it is unclear how long we will be in the pandemic, you should be looking ahead once you have put plans in place to protect your business.
Think about how you will effectively reestablish operations when the COVID-19 pandemic is over, or at least better managed.
What are the processes that will become the new norm? What should go back to the previous ways, if any?
Consider your financial situation and set up ways to create a safety net for your business to fall back on should the need arise.
Relook at contracts and renegotiate with your partners and suppliers for a more beneficial agreement. You can learn more about contracts and commercial agreements in this article.
While we do not know what is coming next, it is important to remain hopeful and optimistic.
Gain as much as you can from available resources and government support while taking the above steps to protect your business. It will benefit you and your business in the long run.
Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each case will differ and, therefore, will require specific legal advice. Feel free to contact us for complimentary legal consultation.