SMEs around the world are being hard hit by COVID-19 and this is particularly true in Indonesia, a country where 97% of domestic employment and 56% of total business investment rely on this sector.

With so much riding on their survival, the Indonesian government has pumped in over US$8 billion for emergency economic support, but many of these resources – via tax cuts and the easing of some trade restrictions – aim for longer-term impact while SMEs need to take action today to ensure survival.

The silver lining is that the battle against COVID-19 in Indonesia is just starting and the country can learn a lot from other countries who have been coping with the virus for much longer. This means that SMEs have the opportunity to take four key strategic steps that help bolster their businesses against the uncertainty now, and ensure they emerge in a strong position during the post COVID-19 recovery:

1. Put their employees first.

• The most important and immediate action SMEs can take to protect themselves and their businesses is to focus on educating their employees about COVID-19 and complying with global best health practices to flatten the infection curve. Early action today will most certainly lessen the economic impact on the SME sector tomorrow.

2. Pivot to cash.

• SMEs need to do all they can to conserve cash by working it out with partners in their ecosystem - their lenders / investors, suppliers, landlords, customers, and third-party business partners such as logistics providers.

3. Digitalize, digitalize, digitalize.

• It has long been said that digitalization of trade, businesses and e-commerce in Indonesia has the potential to unlock billions of dollars of growth. In the current COVID-19 environment, it can help dampen the negative impact of the virus.
• For SMEs, this digitalization needs to happen across a series of layers. The first is payments. While enabling SMEs to access ecommerce platforms that extend the reach and customer base of their businesses, digital payments also help build real-time financial ledgers to gain access to capital funding.
• Concurrently, SMEs should digitalize their businesses to create more efficiencies, and data visibility and flexibility across day-to-day operations. 
• Finally, digitalizing communications through more online social media presence, advertising and marketing can ensure that customers stay engaged with businesses throughout this period and beyond. 

4. Focus on their customers.

• COVID-19 is altering consumer mindsets and habits now and will do so into the future. Businesses that “stop and wait to survive” risk finding that they’ve fallen out of relevance with their customers. To mitigate against this, SMEs should focus on staying in lock step with their customers’ changing behavior with new and innovative practices. This includes better leveraging social media for communications and advertising, starting an omnichannel infrastructure for the delivery of goods and services, and creating new services such as home deliveries and no contact curb-side pick-ups.

These four strategic steps, while not easy in the current environment, will place SMEs on a long-term journey to survive COVID-19 and thrive afterwards.