We are into event management business and due to Covid-19 we can't expect any business this year. Please guide us if we should switch to another industry or should we wait till post Covid, to know the future growth of event management industry?
Questioned by SHASHANK KUMAR, Delhi
If the business is resilient to wait out this pandemic in terms of cash in the bank, I would suggest the same. I assume with respect to event management, the business has to adapt its offering to align to a new era of events (online events, smaller gatherings, private wedding events). If you are able to redefine your process and standard operating procedures, there could be opportunity to revive the business and slowly pick up on the demand.
Wanted to understand how to manage cash in business in this situation. Please help.
Questioned by KG, Maharashtra
The pandemic situation has impacted over 50 per cent of Indian companies on their operations and nearly 80 per cent have witnessed decline in cash flows. Now the crisis remains as to prepare for this major credit crunch, some of the best practices and strategies for consideration are:1. Ensuring a robust framework for managing supply chain.2. Ensure your own financing remains viable3. Focus on the cash-to-cash conversion cycle4. Revisit your variable costs and capital investment plans5. Focus on inventory management, extend payables intelligently6. Manage and expedite receivables7. Consider alternate supply chain financing options8. Audit payables and receivables transactions9. Consider an alternative or non-traditional revenue streams11. Convert fixed to variable costs, where possible12. Utilize an online payment platform, for a smooth transaction process.Cash flow management is an integral element of a company and it’s mandatory to evaluate cash flow requirements, develop appropriate actions under various scenarios, and assess potential risks in and to their customer base and supplier network from time to time.Source: https://www2.deloitte.com/za/en/pages/about-deloitte/articles/managing-cash-flow-during-period-of-crisis.htmlhttps://economictimes.indiatimes.com/news/economy/indicators/coronavirus-impact-over-50-of-india-inc-sees-impact-on-ops-80-witness-fall-in-cash-flow/articleshow/74726229.cms?f
We are a group of ladies that are interested in starting a handicraft business. Please advise on how we can start.
Questioned by Priyanka Gautam, Rajasthan
To start with any business you need to first do three things -1. Make a business plan with your goals in place2. Identify the roles all of you will play, the sources or suppliers of handicrafts and the pricing model.3. Do a detailed SWOT ( Strengths, Weaknesses, Opportunities and Threats) analysis for your businessOnce you do the above you need to collectively plan on how much money needs to be invested to start it off and also to sustain it for months until business picks up. At this stage its important to identify which online channels you can use for visibility as well as for selling.Researching on all the above will put you in a good position to start off your business in a planned way.
Due to Covid, NPA of finance will shoot up. Restructuring may not resolve the problem. It may just defer NPL (non performing loans) recognition. So many people are totally unaware of loan moratorium especially poor and uneducated people. We are doing our best to recover. Kindly guide on how to manage these kind of situation in view of Collection Executive.
Questioned by SAGAR MADHUKAR MALI, Maharashtra
The segments which will get mostly impacted during the lockdown are repayment collections involving visits to households/borrowers. The loan segment/borrowers who are salaried and collections enabled through auto-debit instructions will be less affected. These loans may witness challenges due to a higher proportion of self-employed borrowers, whose income streams may have gotten affected by the lockdown. The vehicle finance also faces challenges in commercial vehicle loans because of curtailed traffic that may lead to weak earnings for fleet operators. Any delay in return to normalcy will put pressure on collections and asset-quality metrics. Additionally, any change in the behaviour of borrowers on payment discipline can affect delinquency levels. The moratorium will help lenders in managing their asset classification requirement. So that they can give relief to borrowers genuinely impacted by the lockdown, while those with the ability to repay are expected to meet their obligations and avoid an additional interest burden.Technology has transformed every sector including debt collection industry. Modern conversation tools available today such as Artificial Intelligence, chatbots and self-service technology will provide the much-needed makeover to the collection process. This technology helps lenders to reach out to people via channels that are more conducive to a conversation. Collection agents have the choice to negotiate the debt recovery via such friendly channels as opposed to threatening phone calls thereby resulting in higher repayments. This helps in dealing with debt recovery in a better manner, streamlining operations as well as adopting a customer-centric approach to the whole process. However, there is no fool proof method to avoid NPAs/NPL. Having a proactive approach can constantly help to anticipate challenges in the process of debt collection and finding practical solutions for them accordingly.
Is there any chance to extend moratorium? What is the Moratorium affect in all banks and NBFCs?
Questioned by Anjappa Gundumalla, Telangana
India today article dated July 22, 2020 states that the banking sector does not seem comfortable with the idea of another extension of the moratorium on fixed-term loans and equated monthly instalments. They fear that another extension could take a drastic toll on the asset quality of banks.According to a report published in Business Standard, the banking sector is currently divided on extending the moratorium period on loan payments. The current moratorium deadline ends on August 31, 2020. The report also said that State Bank of India Chairman Rajnish Kumar has dismissed the need for further relaxation on repayment, citing initial estimates about deteriorating banks’ asset quality in FY21.Many analysts told the publication that slippages in banks’ asset quality could increase sharply and that financial institutions could be heading for a worrisome year without any intervention. Banks and NBFC’s in India are currently facing severe stress due to the loan moratoriums and many have raised contingency provisioning towards any losses due to the pandemic. Most banks are not optimistic with the idea of another extension of the moratorium on loans and EMIs as it could further lead to deterioration in banks’ asset quality.Experts believe that the six-month moratorium has already resulted in mounting pressure on banks and a third extension is not required. The impact on banks due to the loan and EMI moratorium could last much longer if the prolonged relaxation affects repayment cycles. Many experts said that the bad loan cycle can only end when cash reserves with households increase, and that can only happen when economic activity improves with more employment opportunities.
Travel agency fraternity is the worst hit as travel is banned in most places. Moreover, most people are trying to avoid unnecessary tours. Is there any other business that I can pivot to with my expertise in travel?
Questioned by Tridip Chakraborty, Tripura
With the relaxation in E-pass across India, Domestic tours are expected to increase. Bangalore, Delhi, Kochi, Chennai is already seeing uptick in terms of people planning getaways. If you have an already existing customer base, do try and see if they are interested in planning holidays. If you are looking at an exit from this industry, the pivot options are limited. You might want to consider switching industries such as becoming a reseller for your region for any of the Edutech brands (in the school student segment). Some of the brands like Byju's, White Hat Jr , Uncademy are aggressively looking to expand.
I have launched new company after Covid and is going slow. If I need money for the business where should I try?
Questioned by Monika Prasad, Haryana
All the major financiers are giving adequate loans for starting new ventures, development, procurement of machinery etc. If you are businessman and willing to start a business of your own, then you can apply for SME loans. One must have proper project plan or business plan in paper so that no bottlenecks arise at the time of getting loan for business. Loans are available in Mudra, namely Kishor wherein loans are from Rs. 50,001 to Rs. 5,00,000 (For buying equipment/machinery, raw materials, business expansion for existing enterprises). Loans under the CGTMSE scheme are backed without any external collateral or third party guarantee. The MSME loan sanctioned by the Member Lending Institution (MLI) is backed by the scheme which provides the guarantee cover for a large portion of the loan amount. Kindly check with your nearest financial institution for getting further details. Visit your nearest public-sector bank / NBFC for opting suitable loan and scheme as per your requirements. You can also consider "Ashwas Dinam Gold Loan" and “Restart India Pradhan Gold Loan” provided by Muthoot Fincorp Ltd (MFL) for immediate funding.
Can Traders register under Udyam? If yes, under which category?
Questioned by Shivam Mehta, Maharashtra
Yes, every type of business entity including one-man company, proprietorship, partnership firm, manufacturer, producer, limited company, private limited company, limited liability partnership firm, co-operative societies, any association of individuals, retailors, Hindu Undivided Family or any other undertaking can register under Udyam/Udyog Aadhaar.Your business needs to meet certain eligibility criteria defined in MSMED Act, 2006 to be classified as a Micro, Small and Medium industry. Owners of enterprise and company should check if they can be classified under MSMED Act. The trader can register under the category as per the turnover of the company.
Please suggest any suitable professional course to run my boutique smoothly
Questioned by Nidhi Agrawal, Uttar Pradesh
Ideally if you want to manage it as a business venture the best would be to undergo part-time or executive management courses. There are some courses which are specific to businesses like Management in Family-managed or owned businesses. You need to choose the course based on your time commitments and investment you want to make in the course. There are many online courses that can be taken on sites such as Udemy, Coursera etc.
How do we avail financial support scheme 1.5 Lakh crore declared by GOI. Who are the disbursement bodies/organizations. What are the other support schemes available
Questioned by Subranil Gangabasi, Karnataka
Under the 100% Emergency Credit Line Guarantee Scheme (ECLGS) backed by a Government of India guarantee, Banks from Public & Private Sectors have sanctioned loans worth over Rs. 1.5 lakh crore as of 18th August, 2020, of which more than Rs 1 lakh crore has already been disbursed. Under the ECLGS, Public Sector Banks (PSBs) have sanctioned loans of Rs 76,044.44 crore, out of which Rs 56,483.41 crore have already been disbursed. Whereas Private Sector Banks have sanctioned loans of Rs 74,715.02 crore out of which Rs 45,762.36 crore have already been disbursed. You may visit the nearest top lender banks such as State Bank of India (SBI), Canara Bank, Punjab National Bank (PNB), Bank of India, Union Bank of India and HDFC Bank Ltd, for the schemeshttp://bit.ly/SBIGECL
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