Of all the dizzying statistics and data points reported in the fast-moving Coronavirus crisis, there is one that really stands out for global companies: As of March 24, 2020, just over two months after the first case of novel coronavirus was detected outside of mainland China, one-third of humanity (despite a roughly 98 percent survival rate) is now in lockdown.
Think about that. That’s 2.6 billion people. Or, if you prefer, the entire planet’s population in 1952.
And of those billions, it’s a safe bet that hundreds of millions of them are employees working for global brands. The question is: what are the opportunities and challenges for American companies doing business abroad?
First, note the bit of good news framed in the question. There are opportunities. A forced global shutdown means that your competitors are dormant, too. There’s no one to outbid. There’s no product advantage to overcome. There’s no target audience that needs better focus.
Not that those companies should be complacent, however. Instead, now is the time to schedule those long-delayed C-suite meetings and brainstorms ideas over how to improve – and diversify – your brand once the crisis is over. It’s also a time to identify company-wide inefficiencies and redundancies. Do you really need X number of people to perform tasks Y and Z?
A Dose of Levity For Global Companies
To be sure, there are challenges, too. Chief among them are bills. There are checks to write to at-home employees (the majority of whom are unable to do their job through no fault of their own) bills to be paid for bulk orders purchased months ago, and money coming to you (in different currencies) from international product supply lines. The trouble is, as noted in the previous blog, is that for the time being, the global supply chain is severely disrupted.
And, while it’s true that small and medium-sized businesses (SMBs) make up the majority of the American economy, what’s also true is 78 percent of workers get by on paycheck to paycheck. That means, according to a study by JPMorgan Chase, companies with fewer than 500 employees have barely a month of cash reserves on hand. With parts of the US economy shutting down as early as March 12, the clock is already halfway to midnight.
Even with the likely passage of the more than $2 trillion coronavirus emergency economic stimulus package in Congress following a bipartisan deal struck just before 1 a.m. on March 25, many small businesses will struggle to remain afloat as consumer demand remains flat. In fact, a CNBC Global CFO Council survey estimates that it could between three to six months once the viral outbreak has been controlled (an as-yet undetermined date) before business gets back to business. Since the global pandemic is just gaining steam in the US and elsewhere, a $2 trillion infusion of cash into the economy may not be enough.
In these uncertain times, the best defense for small and medium-sized businesses – beyond finding a vaccine and effective anti viral drugs on top of extreme social distancing – is information. Data. And the ability to manage and manipulate that data in real time.
Mobilized Money Management
For SMBs, payables and receivables are the front lines of money management. Having a real-time sense of what’s due, when, gives businesses the opportunity to potentially renegotiate deadlines, and manage their limited cash on hand more effectively, perhaps preferentially paying employees while delaying payment elsewhere.
During this Coronavirus convalescence, companies would be wise to research and invest in organized, holistic integrated approaches to international financial transactions and payment management. Specifically, companies should be looking for:
- CRM-like control that allows for international payments;
- Bill alerts based on due dates and exchange rates;
- A currency rate calculator, which manages multiple currency providers at once; and
- Integration with existing business applications like Salesforce, Hubspot, and QuickBooks.
Taken in whole these measures will help reduce volatility while safeguarding profit margins.
It’s been over two months since the world began grappling with the health and economic impacts of the Coronavirus, sequestering one-third of humanity at home. While the news can be dire, not all of it is doom and gloom. There are always opportunities for personal and professional growth. When the day dawns and this crisis is finally over it’s imperative that your business is ready to head back to the office with the right tools in hand.