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REALITY CHECK

Five ways you can adapt your business to Covid disruption

Business flexibility is key to surviving the economic threat of Covid-19

In Summary

• Business owners explain their versatility, followed by tips for other traders

An open-air shop in Ruiru on the Nairobi Thika superhighway. SMEs account for 75 per cent of the total workforce
An open-air shop in Ruiru on the Nairobi Thika superhighway. SMEs account for 75 per cent of the total workforce
Image: JACK OWUOR

Every business has been affected by the raging Covid-19 pandemic. Consumer purchasing power has dropped, some businesses were ordered shut, while the rest face an uncertain future. By the end of May, the curfew and movement restrictions will have been in place for more than nine weeks.

Good news is that many businesses are likely to survive Covid-19, depending on the depth of the owner’s pockets, the location of the business and the quality of the business’ relationship with its customers. Sadly, a significant number of businesses will not survive, and this will be seen across the board, from roadside kiosks that don’t reopen to large corporate entities declaring bankruptcy.

Key to business survival is the ability to adapt to the changing circumstances. A good example is the inter-city public transport sector. The stoppage of movement to Nairobi and Mombasa — the two largest cities in Kenya — left many passenger transport operators with idle vehicles.

However, the demand for courier services has grown because people unable to travel decided instead to send parcels. Several operators have converted their buses and matatus into cargo carriers to meet this growing demand.

Other public transport operators have switched routes. “I am only doing short local routes because I can no longer go to Mombasa,” says Andrew Kiwoi, a matatu driver in Taita Taveta county. The local traffic is not much because of the cessation of movement, but it at least keeps him going.

The shift to working from home has forced other types of businesses to likewise adapt. David Nzioka, a photographer who specialises on corporate clients, saw his business take a beating when all events for which he had been booked were cancelled. To adapt to the changed situation, Nzioka is also working from home.

“I do graphic design and printing, too. That is supporting me a bit,” he says. It goes to show that skills that may seem irrelevant at one moment could prove very useful in future.

The emphasis on social distancing meant that shops where young people played video games could not operate as usual. Jay Otieno, a video games operator, is now hiring out his PlayStation devices but only to trusted clients, who want to continue gaming at home.

“I charge Sh500 per day for each PlayStation,” Jay says. His clients take the devices in the morning and return them in the evening. This shift helped him keep generating revenue because health officials warned about the lack of social distancing in his shop.

The Covid-19 crisis will eventually turn into history and business will resume. The government has been advised to help small and micro enterprises survive the pandemic because SMEs are the biggest source of employment.

Official data indicates that two-thirds of Kenyan adults are casual workers, farmers or self-employed. As government works out an approach to assisting small businesses, what can business owners do to survive?

1. Show up and sell!

It is tempting to take a break when the number of customers is low. As long as you have decided to stay in business, keep opening as much as is possible. Maintain quality standards. Such consistency makes you a reliable business partner that customers can trust long after the worst is over. As the famous saying goes, 80 per cent of success comes from simply showing up for work.

2. Keep marketing

One should not get tired of marketing their business even in periods of low turnover. Remember, customers are still watching. The use of social media offers opportunities for low-cost, high-impact marketing because advertising rates on social media are within the reach of small business. Larger businesses can negotiate discounts to advertise in newspapers, radio and television.

3. Explore new opportunities

There is an increase in online retailing as more people work from home. Globally, online retailer Amazon.com is recording such huge sales that its boss Jeff Bezos is likely to become the world’s first dollar trillionaire.

Most of us have a long way to go before we achieve such fortunes, but just as some matatus have been converted into cargo vans, there is never a perfect time to explore new opportunities.

The new markets, if viable, could generate additional income when good times return. However, heavy capital investment (land, machinery, buildings, motor vehicles) is not advisable at this time because it could deplete much-needed cash reserves.

4. Adjust your prices

The law of supply and demand states that when demand is low, prices should be reduced. When demand is high, prices go up. This is what economists describe as the ‘invisible hand’ of the free market.

Adjusting prices downwards during Covid-19 could help attract more customers. You could advertise a sale of slow-moving items to get them out of the shelves. However, if business is booming, prices go up. A good example is the price of face masks, which would ordinarily cost less than Sh20 but now cost an average of Sh50.

5. Collect debts

Almost everybody is complaining of empty pockets, but there are still people getting regular salaries. There are businesses thriving during this period. This is the time to follow up on all those people who bought goods on credit and have not yet paid.

You can be sure that not all the debtors will pay up, but whatever cash you get from them can help through these trying times.