An Insight to cope with Covid-19 and future challenges

An Insight to cope with Covid-19 and future challenges!

Covid-19 the Pandemic perhaps the biggest disastrous moment of our life taught us so many lessons. 

It realized us how under prepared we had been to cope with such a tragic event.  It not only realized us how careless we are health-wise but also pointed out as to how vulnerable we are from a financial point of view in crisis time. Time has come now to prepare ourselves not only to bail out from it but also to start thinking right now to get ourselves ready in advance for the viruses which we would face in the future.  It also forced us all to think to get prepared for future financial challenges.  People are looking more conscious as of now for personal health. The pandemic has awakened us to give priority to our health. Health is not my subject so what is advisable is to have counseled with health experts to prepare yourself strong and more immunized for the future. Today my subject is to throw some light on certain things which might help us to cope with the future financial challenges.

We have noticed that every 10 years or so our country had been witnessing an economic crisis.  We have been facing economic problems one way or another way long back from the year 1971 when war broke between India and Pakistan; 1977 imposition of emergency, 1990 foreign exchange crisis, 1999-2000 dot com bubble, 2009 US subprime problems and now Covid-19 the pandemic.  What next? We do not know but what we understand is to start preparing ourselves to face future financial threats.

(1) A lesson for professionals!

Understanding what you do best is essential to succeeding professionally. But often we are unclear on our strengths.  Identify your strengths, discover your natural gifts, your passions, your skills, and your greatest abilities.  Develop your strengths and increase your value as an employee.

Your professional future will depend on your strength and skill. Try to improve your strength with the gain of knowledge.  Don't be overconfident that you have a degree from a premium institute and your job will remain secured in any circumstances. We have witnessed the dramatic changes in the job environment where the real talent and not degree holders are in more demand now.  Although certain academics will always remain a prerequisite from the entry point of you but the future career will only depend upon how much you are updated from the knowledge point view and to what extent you are adaptable to changes.  Learning new tools and techniques will become an ongoing process & one must have to remain alert always to adapt to the rapidly changing things. If you are updated; knowledgeable, dynamic and adaptable in nature, you might face comparatively lesser hardship during crisis time. Barely holding a degree of Chartered Accountant and expertise in the field of finance and taxations might not be sufficient for you unless you have expertise in technology-driven financial tools.  Data analytics, algorithm techniques will be used more widely for financial control and business risk management.  A business school graduate in marketing must also have deep knowledge of tools like digital marketing and data analysis.  So will be the case with engineer graduates. Barely knowledge of software and programming will not be enough unless you have expertise in Machine learning; Data science, AI, Blockchain technology, cloud computing, etc.

Therefore, acquiring knowledge and adapting innovative technologies will be playing a vital role in deciding the career growth.

(2) A lesson for the business community!

Markets are changing very fast these days.  We have been observing that products which were in demand 10 years back hardly find a place now.  The consumer goods industry is facing its greatest challenge yet; if you want to survive the next few years, you’ll have to make some big changes to your business model. Over the next ten years, we’ll be witness to more disruption in the consumer goods industry than in the last 40 years combined. The model that proved so successful in the past is quickly becoming obsolete.   We see that the old products are being replaced with some new innovative versions over a period of time.  The marketing pattern has been adopting a lot of new things now. Consumer preferences are evolving rapidly and are demanding contemporary and cost-effective products with time. So if you have to remain in the business whatever may be the field, you have to evolve with the time.  You shall have to adopt different product mix keeping in mind the consumers changing attitude.  Look at the example of the automobile sector.  You would observe that cars are now equipped with more innovative features having many censors providing extra and better convenience to consumers. Those who stuck with the old style have been thrown out of the market. This is just an example.  My emphasis is that discover the shifts in consumer behaviours to unlock fresh insights to drive your business.

Growing e-commerce penetrations has been threatening the physical stores.  Physical stores shall have to cope with these challenges for survival.  They shall have to go for cost-cutting to compete with e-commerce players. 

Automization in-store operations, using bar code, digital payments, and adopting information technology for inventory control can drastically cut administrative costs so that one could compete with the e-commerce players.  Better space utilization and effective display can also cut their store costing. 

Introducing attractive schemes like credit points, aggressive discounting, home delivery, and accepting orders online can attract customers largely. You should not always blame the competitors rather you shall have to adopt new ideas and strategies to counter the challenges of others. The most vital and important point is that be flexible and don't be rigid with a single business model. Always put multiple product choices in your business model so that you could shift focus from one to another if time demands the same. The conclusion is that one shall have to keep move on with time to incorporate new techniques, innovation, and flexible product mix to remain in the market.

Lastly, cash is the king of the game, try to keep sufficient liquidity in hands so that you may cope with the downfalls and uncertain business environments.

(3) Strategy to cover future financial risk!

If one has to secure himself for future financial risk, he shall have to start saving one extra penny right now to safeguard himself and his family from COVID-19 like future financial risk. There is a very old Marwari quote that "a penny saved is a penny earned".  We can save a good amount if stop spending too much money on life styling. Don't put yourself into financial trouble barely for showing off in the social circle. Allocate the amount judiciously for life styling so that you could save a decent amount for your future financial safety. Try to make a monthly budget and then analyze every expenditure to see where you can save an extra penny.  It's up to you how much you get expertise in saving while maintaining the same standard of living.

Investing:

It is very important to invest the savings in such a way that not only it could meet your future requirements but also the capital remains protected. The basic thumb rule of investing is that don't put your money entirely in a single basket.  It should be split in different portfolios in such a way which will not only meet your future needs but should also yield a reasonable ROI. You will be having lesser returns if you invest conservatively and vice versa.

 Investing your savings is also an art.  It is advisable to invest in a balanced way so that return could be optimized.  It depends upon a lot of things and your future requirements of funds which vary from person to person.  So there is no set theory of investment.  You must have a systematic portfolio in which you remain with a certain amount of liquidity in hand and at the same time having some risk rewarding investments which may give you a handsome return from long term perspective. Further, you must cover the future health liabilities issue as well as life cover.   An indicative chart is being given below as to how you can invest your savings. It's indicative only just to understand how we can put our savings in different portfolios.

                            

- Rajendra Jhanwar