Business Tips On How To Get Through The Pandemic Period
By: Arudi Satyagraha | July 21, 2021
First of all, let me share with you my opinion about this current situation due to the pandemic of covid 19. There are two things I would like to stress here:
- No one is truly an expert in dealing with this situation because we’ve never been in the same situation before. The previous pandemic happened more than 100 years ago, and for sure none of us was born yet. We absolutely have no experience in regard with this pandemic or this situation.
- Every business or industry has its own problems or challenges and it differs from one to another. Even within the same industry it differs from one company to another.
On this occasion I will talk about how to get through the pandemic period specifically for Food Catering Business.
Whenever the downturn hits, we normally switch to survival mode such as making deep cuts and reacting defensively. Some set of problems that most companies are commonly facing are Sales, Debt, Organization Structure and Digital Transformation.
SALES
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Sales has been extremely declined and has given us a big headache. Market has just suddenly disappeared… What should we do?
In connection with this situation we have to search for, or even create a new market. We have to be flexible in making some changes in our business and we have to be ready to shift to a new business circumstance or business model that will work better with the current situation.
During the early of the pandemic period we were still searching for a new concept or new service due to our traditional markets were almost doomed. We came up with an idea of selling food to households and expecting that it could generate regular sales though it would take some time to grow to get to the minimum quantity that we have targeted.
It worked well in the beginning, growing significantly, but then while it was actually still far from the target it started to go down, do you know what happened?
The new competitors emerged and suddenly grew like mushroom everywhere, they are who we call “emak-emak”. They just did it in a simple way at a very low cost and sell their food to their friends, their neighbors and their relatives. As people’s buying power was going down significantly, for sure they will pick anything cheaper as long as it could fulfill their needs.
Other option for us was to sell frozen food, but this one was also not possible since our production facility was not designed to meet this purpose, and it would be a very big investment if we want to get into the business, while resources especially money were scarce and we had to be very prudent in spending our money.
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Under this situation we finally came up with our decision that we had to go back to our core business which is banquet. Some examples for banquet is wedding receptions, birthday parties, meeting events in offices and ceremonies.
By doing this we involved in the whole process of the events, so we are not only selling our food but also selling our services, from the very beginning till the end of the process. We even call our sales team as Banquet Consultants.
We help our clients to arrange their events from setting up the menus, preparing all the food and equipment needed, and we will be the one who responsible for preparing everything at the venue from designing the lay out, setting up the tables with all the food and decoration and serve the guests from the beginning till the end of the event.
We put all our effort in this specific market and it turned out to be the right decision as it was growing significantly and getting better and better every month.
DEBT
Companies with high level of debt are especially vulnerable during a recession. When recession could be predicted in advance, we might prepare ourselves and made some necessary steps like deleveraging our debt to lessen the impact when the crisis hit us.
Unfortunately, it was not the case with this covid 19 pandemic. It just came to us all of a sudden and everything was so unpredictable. However, as we were left with no choice we then had to study and find a way to get to the solution in anyway we could.
In our case, we proposed to our bankers and applied for some debt relief such as rescheduling the payment of the principal and the interest, and also asking for a better interest rate. It was done successfully as our creditors approved our application.
ORGANIZATION STRUCTURE
When this crisis hit us and our sales is going down tremendously, our organization structure which previously suited our scale of business is suddenly becoming too big and overhead cost is high
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Under this pressuring situation, the management normally think about laying off their employees. But layoff is actually something that we have to avoid the best possible because they are not just harmful to the workers but also costly for the
company, as you know that hiring and training are expensive. Besides, layoff can also hurt the morale of the workers.
As an alternative to layoff, we can implement the system of daily-based job where the number of workers is set to follow the volume of work that we have to do. As the demand of our products increased, the more employees can be assigned to the job.
Besides labor cost, we also need to increase efficiency in all other areas and in our case it helped so much in cutting the costs that enable us to pay for our overhead cost and gave us some profit.
DIGITAL TRANSFORMATION
Why digital transformation is important especially during the course of recession?
There are at least four reasons in connection with this issue why we should implement the technology, and they are:
- Work can be done more efficiently
- The process can be done faster
- Data can be presented more accurately
- Information can be accessed easily
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In the case of our company, we do this transformation but we can’t fully apply it due to some reasons i.e. the industry is labor intensive and the nature of the process is quite complex. For example, our schedule can be changed anytime and many times following what our customers want. We almost never say “no” to them. The system cannot work under this condition.
However, certain functions in our company like Sales & Marketing are already implementing this technology and it really helps us in running the business and it can be done more efficiently and effectively.
Finally, let me conclude this article briefly by giving you some keywords:
1. Don’t crash your company – don’t run out of money
2. Be flexible and ready to adjust – you have to be agile
3. Recessions offer opportunities for change
Good luck...
(This article is taken from the IPMI's Webinar delivered by Gathut Arudi in December 2020)