How Large Companies can Support Small Companies During the Covid-19 Pandemic- 3 Ideas to Explore (by Dr. Nirmal De Silva)

Over the last few days, I have been speaking to a number of small company owners across Asia. It is very clear that small companies will be impacted the most from an economic perspective due the pandemic. Even though its is premature to predict the magnitude of the impact, there is no doubt that every industry would be impacted. The fear & uncertainty of the future is something that is in the mind of every business owner. Whilst some organizations are better prepared to deal with scenario others are visibly struggling indeed. 

Mainstream & social media across the globe are sharing many examples of large organizations doing fantastic things to support their communities in the fight against Covid-19. It is inspiring to see that these large organizations are creating impact & going beyond their normal call of duty. The purpose of this article is to share 3 things that large organizations can do to help smaller companies both during & post Covid-19 so that they can minimize the economic challenges & survive as a result. 

1. Re-evaluate the Credit Policy of the Organization: This can be done potentially in two ways. Firstly changing the payment terms to suppliers. If the current payment term to suppliers is 60 days this can be changed to 30 days for example in particular to smaller companies so that it helps their cash flow. Similarly in B2B cases large organizations can support their customers (smaller companies) by giving them an extra credit period so that they can pay back later than usual which will assist in their financial position. The key aspect that large organizations need to keep in mind is that even though everyone is going to be impacted due to the pandemic the smaller companies are going to be more vulnerable. Now is the time for organizations to be impact driven & support their communities & stakeholders more than ever. Larger organizations should also not try to exploit the situation for selfish or profit oriented objectives. This is myopic at best & suicidal to the brand image at worst. More importantly such behaviour raises ethical & moral considerations which should be non-negotiable from a governance perspective. 

2. Foster a Small Enterprise for a Period of Time: Large organizations can foster small companies by providing them a variety of support mechanisms such as 'soft loans', paying utility bills, settling an outstanding lease, payment of office space rentals (or providing free space), ordering additional inventory or products & introducing new customers. Large organizations can foster smaller companies within their existing supply chains, customer segments or similar industries. Similarly they can support smaller companies to ensure 'Business Continuity' by helping to replicate some best practices already adopted by them. If 200 large companies for example can foster 2 such such smaller companies each for 3-6 months it will no doubt have a tremendous boost to the economy

3. Re-allocating Corporate Social Responsibility (CSR) & Other Budgets: Large companies can allocate some of its CSR budgets towards supporting small enterprises overcome the economic impacts of Covid-19. If only small budgets are available, then they should consider cancelling annual events such as the Sports Day, Christmas Party, Top Performance Awards etc. so that money saved can be used to support smaller companies in this hour of need. For companies who's financial year commences in April make sure that you allocate some budget for CSR activities & supporting smaller companies. Tough economic conditions should not be an excuse to scrap such budgets & shy away from being a responsible entity. Larger organizations have a responsibility to lead from the front & 'walk the talk' 

It can be argued that there are many other initiatives that large organizations can implement to support smaller companies in particular during these times. In fact many organizations have already come up with some innovative ideas in different parts of the world. However, for the purpose of this article the author has narrowed the scope to only 3 areas which can be implemented in a expedited manner with the right mindset.

Well done to all the organizations who are leading by example and first off the starting blocks. For the rest of the organizations the time is right to get in to the race after all it is the right thing to do and what is important is not just 'starting this race but finishing it off' as well !!

Meanwhile stay safe everyone, be responsible, ensure social distancing & remember that prevention is always better than cure!!

The world is united in the fight against Covid-19. Together we can overcome this!!