6 useful tips to help SMEs bounce back in 2021
The economy is not entirely going back to normal in 2021. This is the outlook of the Bank of the Philippine Islands’ (BPI) Lead Economist Jun Neri which he shared with Small Medium Enterprise (SME) partners during the Ayala Enterprise Circle (AEC) online forum titled, Business Planning for SMEs: Outlook and Leading Practices.
Neri said employment, imports, mobility, remittances, and vehicle sales indicate green shoots for demand, but normalization is still elusive. To help businesses navigate the uncertain economic environment, AEC, together with BPI, aims to educate SMEs to plan their businesses as they prepare for the upcoming year.
“The Philippine economy is not alone in facing the challenges of balancing health and economic goals. New data show we may be adjusting better and we should reach our 2019 level of spending and output by 2022,” Mr. Neri said. “Risks from inflation, interest rates, and the Peso are likely to remain manageable throughout most of next year, which means firms can probably pay more attention to reviving and adjusting their business to the new normal.”
For his part, AEC Head and Ayala Corporation Managing Director John Philip Orbeta, is encouraging entrepreneurs to proactively plan for their bounce-back strategy.
“Start by applying a business planning framework that touches on the short-term goal of weathering the storm and the long-term goal of adjusting to the better normal,” he said.
The recent online forum presented six useful tips to help entrepreneurs plan for their business recovery in the upcoming year. These tips and leading practices were shared by Mr. Orbeta and AEC Pioneer Members such as Ellana Cosmetics, El Nido Resorts, and Mama Lou’s Italian Kitchen.
- Identify your short-term and long-term goals. Planning and preparation for a post-pandemic economy should include both short-term and long-term initiatives. Short-term goals are initiatives to ensure survival, while long-term goals are initiatives to transform and adjust to the new environment, or what we refer to as the better normal.
- Evaluate your business drivers. In creating a business plan, entrepreneurs should learn to evaluate their business drivers, which include employees, customers, and operations. “Ask questions that address what is important for the business to succeed. Your answers to the key questions will tell you what activities your business should prioritize and how to execute them,” Orbeta said.
- Prepare for different scenarios. It is also important to prepare for different scenarios. By using scenario planning or scenario analysis, entrepreneurs can better plan for their business and identify the factors that will drive business recovery.
- Expand your product line. Expand your product line by offering products or essentials that are related to the new normal. According to Diego Buenaflor of Ellana Cosmetics, the cosmetic industry was affected by the changing behavior of consumers, so the company brought in skin care as part of their offerings. They also released personal care soaps, shampoo bars, and treatments. Meanwhile, Mama Lou’s Kitchen also created two new brands: Mama Lou’s fresh and Mama Lou’s essential to continue making their products available outside of the usual dine-in set-up.
- Assess the needs of your community. Assess what the future is going to look like, then pivot and adjust. You need to know what you have and bridge the gap between the community and business so you can move forward. In El Nido Resorts, they opened their kitchen to answer the needs of the community for food. They also provided housing to those who are in need. “Scan what you have to offer. What is your product and service? Stay afloat and be very alive—this is where the entrepreneurial mindset starts,” said Javi Hernandez of El Nido Resorts.
- Learn from your experiences. Remain optimistic despite the challenges and learn a lot from your experiences running a business during the lockdown. “Provide value to your customers. If you’re in the food business, learn to streamline your menu so people can still enjoy your food even at home. Think of creative ways on how to communicate with your employees and customers, embrace technology, welcome change, and act quickly,” said David Sison of Mama Lou’s Italian Kitchen.
The Ayala Enterprise Circle is part of the Ayala Group’s broad support initiative for SMEs. It was recently launched to better serve the needs of many entrepreneurs who are also part of the Ayala Group’s ecosystem.
AEC offers services that help Ayala SMEs develop new skills for their employees, enable connections to business leaders and expert mentors, and provide a solid platform for businesses to scale and prosper through exclusive discounts and member benefits. Visit www.ayalaenterprisecircle.com to know more about how to become a member of this Ayala SME network.
Published on November 25, 2020