Thiam Hock joins Dato Munirah Looi (Brandt International) and Joshua Liew (EspressoLab Asia) to discuss how COVID-19 has changed the way business operate and what businesses need to do to survive.
To jump straight to Thiam Hock’s comments, follow the time stamps below:
(16:30 refers to 16 minutes and 30 seconds in the video)
16:30 – The SME road to recovery starts next year, not this year. You will be losing money this year, that is a given. How do SMEs preserve cash flow for the next 6 months?
19:30 – Thoughts on EPF deferment / exemption & wage subsidies.
Wage subsidies help, but it’s only for 3 months, and SME’s need to survive for 6 months.
29:05 – Brick & mortar businesses, vs. online businesses.
33:15 – What measures can companies take to reduce monthly operating costs? Look at your forecasts, be sure to look at minimum 30-60% fall in revenue for the year. Talk to you landlord – can they extend 20-30% discount during the MCO?
36:30 – Advertising and promotional budgets. Businesses should be spending on anything that can help sales in this period – and media companies will be giving great deals now.
38:50 – Wages. Can we convert wages to be more of a variable cost?
43:00 – Mergers. Does it make sense to acquire a weak competitor? Does it make sense for weak companies to merge?
51:00 – Private equity and venture capital. PE and VC firms will be like vultures in 4-6 months time – and business owners will no longer be able to command high valuations.
In the next 2-3 years, the “valuation game” won’t happen. (…) It’s gonna be very, very much subdued, the valuation game.
1:01:40 – Senior staff and bonuses. What do you do for staff who insist to be paid fully during this MCO?
We are facing a situation where you cannot afford to to absorb losses for six straight months. (…) It’s a time of reckoning.
1:03:30 – What is the outlook for the wellness industry?
1:08:20 – What do businesses do if the MCO is extended? Some form of economic activity has to resume. A call for religious leaders to make responsible decisions, and for business to take health and safety measures seriously when business resumes.
It’s really a question of Lives vs. Livelihoods. And whether the cure is going to cost more than the problem itself.