Finance

Tough times, tougher entrepreneurs: 10 lessons during a pandemic


By: Robbie Antonio

As the coronavirus outbreak ravaged the world, people were locked down, hospitals got overcrowded, and the global economy shut down. 

Revolution Precrafted Philippines, Inc., my property tech firm that set out to democratize the ownership of designer homes, found itself in the middle of a supply chain disruption. This resulted in cross-default situations and forced my company to pivot back to our core business.

In this article, I take stock of lessons I learned and share them to aspiring and fellow entrepreneurs. I hope these will help inoculate businesses against threats in this volatile, uncertain, complex, and ambiguous world now under a COVID-19 siege.  

  1. An asset-light business model is not always a good model.

I have always envisioned Revolution Precrafted to be an asset-light, intellectual property-based company. Our exclusive designs are our primary assets. However, the downside of this is that you will have less control over other parts of the business. As you outsource some segments of your operations, you exercise less supervision over contractors compared to full-time employees. Since independent contractors have greater flexibility over what they can contribute, you are taking on a risk that they may be unreliable, may not fulfill your business requirements, or may not deliver the quality you expected.

With the disruptions to the housing and property sector, we at Revolution found our own operations as a builder-supplier of homes to partner-developers affected by the general economic downturn. 

The lesson is that we must never stray again into such aspects as building the homes ourselves, and instead concentrate on our core and high value-added work of promoting home designs and art creations. And so our pivot now involves going back to our core business which is to leverage on our intellectual property, our revolutionary home designs, and license them to any developer or end-user for their own homes or projects, using their own contractors.

  1. Practice constant communication.

I believe that empathetic and transparent communication is very important especially in times of a crisis when employees and consumers are confused and feeling vulnerable. 

During a pandemic, consumers generally understand that most companies are facing a difficult time and they are more tolerant of minor mistakes and delays, as long as we communicate with them in an honest and timely manner.

  1. Going global is very difficult.

My big idea was to make globally acclaimed designer homes affordable to a mass market by rolling them out using new prefab home technology. But I realized that an aggressive vision of going global immediately sometimes does not work. 

As international borders closed and the global economy shut down, vulnerabilities in Revolution’s supply chain were exposed. Temporary trade restrictions pushed economies to be self-reliant and placed domestic companies under immense pressure to look inward and reduce their reliance on global supply chains that are now perceived as risky. 

  1. Decentralization is the new normal.

The pandemic has compelled society to take action and seize the moment in many areas where we have dilly-dallied in the past — such as climate action and decongesting cities and even in providing connectivity for all. The push for decentralization is an irreversible trend given the government and private sector’s massive infrastructure build-up and reverse transmigration (e.g., Balik Probinsya) programs.

I believe that the new systems and protocols such as blended-distanced education and telecommuting or work-from-home will become permanent options for people and institutions. These have positive impacts on society, such as less traffic, and just better public health, order, and safety. Single-detached homes have become increasingly relevant in this New Normal. More and more people are moving out of the metropolis, supported by more robust digital infrastructure and they are again choosing single detached homes — on the ground.

  1. Adapt quickly.

With the pandemic, decision-makers are faced with a rapidly-changing business environment that gives us very little time to respond to threats. 

The key is to develop the ability to evaluate ongoing changes and react immediately and appropriately to disruptions, and to continuously repeat this cycle. 

We should practice new ways of problem-solving in an unpredictable environment and be prepared to reinvent ourselves in order to survive and cushion the impact of the crisis on our businesses.

  1. Leverage technology.  

With government-imposed lockdowns, we saw that companies with established online platforms are in a better position to take advantage of the rapid migration of consumers to online channels. Quick-thinking entrepreneurs accelerated their digital transformations — selling their products on social media and mobile applications, accepting online payments, and partnering with delivery services. 

I believe that physical distancing and the trend of in-home consumption are likely to continue even after the pandemic, and that businesses must embrace technology in order to connect to customers. Those that still do not have an online presence need to react fast and implement their long-overdue digital transformation.

  1. Associate your brand with the good.

In this time of crisis, consumers will not forget brands that displayed acts of kindness, especially if done with genuine generosity. 

These could be in the form of donations of medical supplies or assistance to the community, or by sharing messages that promote positivity despite the pandemic.

  1. Prepare an emergency plan. 

Micro-entrepreneurs without formal crisis management planning are among the hardest hit by the pandemic. This highlights the importance of a business continuity plan, which may include prevention, response, and recovery. 

A contingency plan will help leaders remain rational as we are guided by a planned set of tactics when responding to a crisis and making decisions, allowing our businesses to bounce back stronger after a disaster. 

  1. Know your customers’ needs. 

The pandemic and the resulting economic downturn resulted in changes in consumers’ buying behavior. These include prioritization of essential needs and sanitization products amid a tightening of household budgets. As a consequence, some products suffered from slowing demand. 

As entrepreneurs, we need to be flexible and to make the necessary adjustments to ensure the survival of our businesses.

  1. Coopetition is key.

Lastly, we can only defeat this crisis if we put aside our differences and present a unified front. Coopetition, which is simultaneous cooperation and competition, can help us overcome lack of resources. 

By looking at joint vaccination drives among local companies, we can see that strategic alliances may be a good option for businesses and may provide opportunities that are otherwise not available. Entrepreneurs must consider possible partnerships and start communicating with potential allies.

 

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About the author

Ty

Ty is a talented writer. He performs the job of entertainment news writer at BBC247. He is also a good football player.

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