How These Small Business Owners Survived The MCO And What You Can Learn From It
As we emerge from two years of COVID-19 induced movement control order (MCO), it’s not surprising to hear that many small and medium enterprises (SMEs) have been severely impacted.
Unlike their bigger counterparts, these companies had to navigate the challenges of the MCO without the benefits of having massive resources to fall back on. At least 150,000 SMEs did not survive to welcome 2022, resulting in 1.2 million job losses since the dawn of the pandemic.
If you think that sounds bleak, wait till you see the results of last year’s mid-term survey by Small & Medium Enterprises Association Malaysia (Samenta), which stated that of their members had given up on making any sort of recovery in 2021.
Which is why in this article, we’re going to be talking to two SME business owners who managed to survive the lockdown, and what they learned from it.
Going beyond providing just a service, adding a personal touch
Luqman Omar, owner of the Barber’s Turf GBK barbershop in Seri Gombak, told us that surviving the lockdown was not easy at all.
He shared that due to the on-and-off nature of the lockdown and the type of service he provides, his business was open for less than 12 months in the entirety of 2020 and 2021. This led to his business struggling due to the overhead costs that must be paid even if the shop isn’t open.
“Yes, it was a struggle because we can’t open our business at all, and we are the last industry that can be opened during the MCO. Although we can’t open the barbershop, we still had to pay our rental, and our overhead cost, which represents a very significant dilemma for me, as I had to pay out for a business that is not making any money,” said Luqman.
According to Luqman, his two main methods of navigating the lockdown were using his business savings and adapting to the circumstances.
“We did whatever we could do. We start to look into other businesses that can operate during MCO. Inspired by the food and beverage business, we decided to look into the viability of a house call barber service, or in simpler terms, a ‘haircut delivery service’,” stated Luqman.
Luqman also stressed the importance of quality and making genuine connections while providing house calls, as that will ensure his customers will come back to his shop once the lockdown is lifted.
“With the house call model, the most important thing to do is to maintain the quality of our service because only with a premium quality and genuine connection can we ensure that our customers will return to us even after the lockdown is lifted,” added Luqman.
According to Luqman, although the house call model his business adopted was bringing in some money during the lockdown, it was his business savings that ensured the survival of his business.
“During the lockdown, my barbershop was only saved due to the availability of our business savings, which helped cover the expenses incurred by the barbershop, even when we didn’t have any customers,” said Luqman.
Learn to adapt to the circumstances
Nazmi Nasir owns Amitech Solutions, a shop that provides computer works, such as repairs and parts selling.
Unlike Luqman’s business, Nazmi’s business boomed in the early stages of the first MCO, due to people’s realisation that they needed computers/laptops to work from home.
“My business thrived when the first lockdown was initiated. I had more sales than before because everyone realized that they needed a computer to work from home or for online classes,” said Nazmi. The various government initiatives rolled out in 2020 which included incentives and tax reliefs for phones and computers also contributed to this boom.
However, the situation didn’t last as the government did not allow non-essential businesses to operate in the later MCOs.
This caused a severe strain on his business, as he was no longer able to open his shop and receive new customers there.
Nazmi had to adapt and he switched to an online model, where his customers paid to have their computers and laptops picked up and delivered to Nazmi.
“However, this did not work so well, as a lot of my customers were not keen on paying the high delivery charges,” said Nazmi.
Like Luqman, Nazmi also had to pay rental and operating costs, even though his physical store was closed down. So how did he deal with this situation?
“I had to dip into my business savings a little, as what the company brought was not even enough to cover my overhead costs. But due to this, I also had to start thinking about some other ways of making money,” said Nazmi.
For Nazmi, this meant doing odd jobs, deliveries, and investing.
“During the second lockdown, I did a lot of stuff when I’m free. From odd jobs, Grabfood and Food Panda, even investing, I tried my hand at all of them. After all, I needed to find supplementary sources of income to help make up for what my business is not making,” he explained.
When asked what kind of investing he explored, Nazmi said that he was primarily looking for short-term investments that have the potential to give out faster returns.
“Mostly Forex and cryptocurrency trading, as these two types of investments allow for faster returns, which I needed to supplement my income during those months,” he added.
3 key takeaways on surviving the lockdowns
While they may be talking about their business survival, there are lessons we can learn and apply to our own financial management as well.
Savings are really important
The key to surviving any crisis is having savings, which is something both Luqman and Nazmi experienced. Without cash to fall back on, they may not have been able to buy time to implement ideas to save their livelihoods.
That said, the only way to fall back on savings is to actually have them. Which is why experts recommend having at least six months’ worth of expenses stashed away as emergency savings.
Adapt to your circumstances
Things don’t always go according to plan, and your primary source of income could vanish at any moment. In those times, it pays to be adaptable and willing to change your approach. In the case of Luqman and Nazmi, they had to pivot to home visits and delivery-based services under very short notice (a situation that many SMEs found themselves in over the past two years).
In the case of your own finances, this could be being prepared to change jobs or careers if anything goes wrong. Or even being ready to change how your own business works.
Have supplementary sources of income
If you feel like your finances are suffering from your lack of income, try and find alternative ways of making side income, either by joining the gig economy or perhaps by investing.
In fact, it might be helpful to have alternative income sources before you run into problems. This way you will be prepared for anything that might happen and will having extra savings to give you a financial buffer
These two small business owners showed great courage and heart in dealing with the obstacles that came with the pandemic. A little effort today, goes a long way in the future.