Hong Kong is hit hard by the pandemic. The Government has been flushing out lots of assistance to the commercial sectors with the hope that unemployment could be kept at a reasonable level and companies can survive after the virus is contained. One of the most importance assistance is the Employment Support Scheme whereby qualified employers could receive a 50% salary subsidiary per employee capped at HK$9,000 per month for 6 months. Employers who receive the subsidies must undertake not to make redundancies during the subsidy period; and to spend all the wage subsidies on paying wages to employees. Announcement of the names of employers receiving the subsidies as well as the number of employees involved will be available for public monitoring. Penalty enforcement will be taken again the breach of the undertaking.
The SME (small and medium enterprises) Centers previously located in different locations under different government units are now centralized as SME ReachOut located in the Hong Kong Productivity Center. This new SME unit provides advice how to apply for more than 40 funds. Rules of many funds have been relaxed to facilitate application and expedite approval. The most popular funds are the 100% SME Financing Guarantee Fund, Dedicated Fund on Branding, Upgrading and Domestic Sales, Export Marketing Fund, Distance Business Program which aim to help SMEs in marketing and in re-inventing themselves through IT solutions.
Many business owners are excited and have been checking around how to apply for the subsidies and funds.
But wait! The first thing is not getting assistance but to have a thorough assessment of your own businesses during and post pandemic. Each owner should study hard on the expected turnover at least for the coming 12 months or even 18 months. Are there adjustments required on the marketing / sales strategy as well as on the services / products in order meet the changes in the market situation. Some of the funds require monetary matching from the owners and others need to be repaid in future. Owners must honestly and realistically ask themselves: can the loans be repaid on time? Any worry on the cash flow? If the markets of their businesses have been destroyed, they should consider whether to push their services / products to other markets which might not be easy, if not impossible, at the current global economic situations.
Even if the markets are still there, their sizes might have shrunk. It is, therefore, necessary to consider how to sell to the smaller markets. Can all the costs i.e. production costs, marketing expenses etc be reduced to ensure profitability? Is there a need to recruit different talent mix for the new challenges? It is time to examine the human capital within their companies and identify any need for re-shuffling.
To help the commercial sectors to adjust to the new normal i.e. work from home, marketing from a distance etc. the Distance Business Program aims to help SMEs to transform themselves by using new technology. This is great! Again, the owners should be honest to determine whether the technology could help and if the transformation could be done in a timely manner to keep their companies surviving. They should also decide if they have the capabilities to apply on their own or engage services providers at a fee at an early stage to help with the applications and to choose the appropriate technology solutions.
If the future is dim, the last and final option is to close down the operation. Painful but the owners may be able to conserve resources for a come-back in the future!