Supporting the true backbone of our economy—the Micro, Small, and Medium Enterprises—amidst the pandemic
Contrary to popular belief, the actual backbone of the Philippine economy are the Micro, Small, and Medium Enterprises or MSMEs, not large corporations. In 2017, MSMEs accounted for 99.52% of the total establishments in the country and employed 62.9% of the total workforce. These numbers alone show the importance and significant contribution of MSMEs to our growing economy.
Though great in number, a lot of MSMEs find themselves in troubled waters, mainly due to unprofitability and other challenges that limit their capacity to support their day-to-day operations. Especially during a pandemic, many businesses—big or small—had to face an unending barrage of challenges. .
n order to safeguard our economy, the government has to intensify their already stringent efforts to support them as numerous MSMEs find it difficult to pay taxes on time and to repay or borrow loans because of high interest rates. Further, the government should look into alleviating these burdens. Government subsidies are vital to keeping many of these businesses afloat during these precarious times. .
It is also important that MSMEs are future-proofed, encouraged, and aided to invest in research and development (R&D) to protect them from grave threats lurking in the near future. According to a survey by the International Trade Center (ITC), Filipino MSMEs that invested in R&D were less affected by the global health and economic crisis. The pandemic also revealed that digital is the way to go even for small enterprises. Keeping these in mind, MSMEs might stand a better chance against the challenges they constantly face.
To guarantee the continuous growth of the Philippine economy, MSMEs have to be well-supported and acknowledged as a driving force of our country. It is about time that these MSMEs get the recognition and support they so well deserve. And if you’re part of the MSME sector, check out our tips below to ensure your business continues to thrive and grow.
Invest in research to future-proof your business
Apart from government support, entrepreneurs themselves would benefit from seeking out these advancements on their own. It’s definitely less expensive than not being able to function at all as we’ve seen across the country when the pandemic hit. New technologies, processes, and the like give an edge in day-to-day performance, but more importantly, it offers a fighting chance to stay afloat even during such situations. What has been proven to the world is not the realization that we need to prepare if these unfortunate circumstances should happen but rather that we should be preparing for them when they happen. It may seem like a big investment—and it is—but these investments more than pay for themselves when markets struggle.
Invest in digital innovations
This will allow your business to function even when physical channels become unavailable. This is even more beneficial now that all industries are implementing a work-from-home setup. This way both your business can sell anywhere wherever your employees are.
Automate your operational or administrative processes
This will allow your employees to focus on their value-generating activities rather than on repetitive tasks. With improvements in cloud services and specialized hardware, repetitive tasks that can be automated can provide your business more free time to work on activities that can bring in more revenue.
Improve your operational processes and the technology
Investing in new technology also lessens the probability of human error and gives you a more accurate view on your business’ figures. Working with repetitive and, oftentimes, large amounts of information can trip up even the most experienced employees. By investing in technology, this is minimized since the machine does the heavy lifting for you.
There are more benefits your business can gain through investing in R&D. Here’s another article you may be interested in which delves deeper into audit and technology.
Look for ways to optimize and grow
The pandemic has left a lot of businesses in dire need of financial backing to pay past-due loans (whether due to logistics or financial constraints) or to purchase supplies needed to function efficiently. Partnering with other businesses in the form of mergers is a great way to maximize operational costs, selling receivables to give much needed liquidity, or acquiring a business for expansion. When these options present themselves, remember that it is still vital to assess the value of the equity at stake, the value of the business that will be sold, or the value that the acquisition can give you compared to its cost—all of which are dependent on the strategy that will be implemented.