How Can Businesses in Bahrain Survive Corona Virus Economic Crisis
Authors: Dr. Ramy Aljabour
Businesses in Bahrain are facing extremely difficult times due to the Coronavirus situation. A small research that was conducted by American MEC indicated to that, revenue for businesses has dropped from 45% to 90% based on the industries that they are in. For example, medical industry such like small clinics and day-care hospitals’ sales dropped by an average of 45% while retail stores’ sales dropped by an average of 80% and restaurants sales’ dropped by an average of 65%.
Keeping in mid the panic among people living in Bahrain, consumer behaviour has shifted drastically to extremely conservative on both traditional shopping and online shopping. That makes it harder for companies in Bahrain to redirect their marketing activities and understand consumers’ expectations.
Most business owners in Bahrain are now trying to take contingency actions which includes cutting their expenses. To reduce risk and the impact of the current business drop, we need to think about the best case scenario (finding a cure soon) and worst case scenario (taking time to finding a cure). To assist small and medium businesses in Bahrain to survive the coronavirus economic crisis, we have the following recommendations:
1. Must have high cash holding:
a. Unless extremely necessary, stop all payments to all suppliers, any other third party, even rent, to assist you in having the maximum amount of cash in hand.
b. Offer massive discounts on your products to increase sales at any cost.
c. Don’t reduce marketing budget because it is your only hope to generate sales. Consumer behaviour has changed suddenly due to the Virus and no one can predict. It is extremely important to sustain your marketing activities and hope for the best.
d. Meet with your finance/accounting personnel in a regular basis to review the status of cash balance and working capital.
e. Talk to banks and secure approvals on loans, if possible.
f. Talk to your suppliers and ask them for longer payment terms.
2. Cost Cutting:
a. Keep your main employees at work and give others an annual leave now. This must be adapted according to your business needs.
b. Reduce the quantities of your raw material/ supplies/ and stock in general. Make sure to have the main reserve of your stock at all times to avoid out-of-stock if situation improves suddenly.
3. Collect Payments:
a. Contact all of your clients/distributors who have bending invoices and push them
to make payment immediately. Make this a priority.
b. Make sure to issue any invoices which are due now or due in the coming two
c. Offer the clients/distributors who are not paying a discount if they make
We hope for the best scenario to take place before it is too late for our merchants and
business owners in Bahrain. We pray for the health and prosperity of everyone in the Island.
Please feel free to get in touch with us if you have any questions or would like more information on our services.