Most of the MSMEs in Gujarat Facing a Tough Time Post Unlock in COVID-19 Pandemic

Ahmedabad, Gujarat, India

  • Surat-based Stratefix Consulting reached out to more than 100 companies having a turnover of Rs. 10 crores to Rs. 100 crores and conducted a survey on the present market situation
  • More than 85% of companies covered under the survey are focusing on business restructuring
  • 36% of business units are reducing the fixed expenses; 22% of units switched to multi-tasking process to get the maximum output from minimum manpower at low cost

The COVID-19 pandemic has hit hard all the industries, especially Micro, Small and Medium Scale Enterprises (MSMEs). Higher cost, low fresh demand, fixed expenses, and limited cash are the few factors jolting the sector now. Anticipating that getting back on track will take a long time, the MSME sector in Gujarat is adopting an aggressive business restructuring model. 36% business units are reducing the fixed costs heavily; 22% of units switched to multi-tasking process to get the maximum output from minimum manpower at low cost.

These are the finding from a market survey carried out by Surat-based Stratefix Consulting. Stratefix, one of the fastest-growing management consulting firms in India, had reached out to more than 100 companies having a turnover of Rs. 10 crores to Rs. 100 crores and conducted a survey in the first two weeks of July 2020.

Speaking on this survey, Mr. Chirag Patel, Founder and Partner at Stratefix Consulting said, “Due to COVID-19 pandemic, businesses were affected during the lockdown and post the unlocking too, most of the industries, especially MSMEs are facing a challenging time. Our intention for the survey was to know what their current business situation is, which challenges they are facing and what efforts they are putting in to recover from it.

As per the survey findings, more than 85% of businessmen are focusing on business restructuring. 36% of business units are cutting down the fixed expenses. Due to limited new income opportunities and to make the future provisions, they are bound to restrict themselves spending money on unnecessary expenses. 22% participants opined that they are implementing ‘Maximum Work, Minimum Workforce‘ model. To reduce fixed expenses, many workers have been laid off. Moreover, many units are facing a shortage of skilled workers hence they are opting for multi-tasking culture wherein a few workers are given major work responsibilities.

18% of companies believe that due to weak new demands, they are not getting new customers. Hence, these companies are offering the best services to their old customers to retain them. Every business demands a reasonable risk but 14% businessmen believe that this is not a time to take any kind of risk. 10% respondents are focusing more on IT and Automation processes and trying to make the system dependent on machines rather than humans.

To understand why the business units are focusing on business restructuring, we conducted an in-depth study and landed on two major factors. First, there is a lack of new opportunities in the market. Demand flow is very low hence scope to take the business to the next level is limited. Second, cash on hand is also limited. As new sales are not happening, the flow of income is also restricted. Running a company with a small working capital is a challenging task therefore the companies are bound to go for business restructuring. This model can fetch good results at a lower cost and also a need of an hour now,” said Mr. Mukul Goyal Founder and Partner at Stratefix Consulting.

About Stratefix Consulting (www.stratefix.com)

Started in 2017 by two dynamic and ambitious partners Mr. Chirag Patel and Mr. Mukul Goyal, Stratefix Consulting provides advisory and implementation services in the area of Management consulting. Headquartered in Surat, the company has three other locations across India i.e., Ahmedabad, Mumbai, and Gurugram. The company has successfully completed 250+ consultancy assignments and grown the team size from just two to now 20.

Stratefix’s clients varying from SME sectors to large conglomerates. The company’s clientele includes Coca-Cola, Amazon, Asian Paints, Phillips, Surat Municipal Corporation, Rajhans Group, Detox Group to name a few. Stratefix holds diversified industry expertise in Business Growth Consulting, HR Transformation, Business Process Re-Engineering and Market Research. The company conducts DNA (Detailed Need Analysis) of the current Modus-Operandi of client’s business and identifies the ‘Area of Improvements’ and ‘Challenges’ which have been restricting the growth.

Both the Founders have rich experience in Management Consulting. Banking upon it’s an excellent and energetic team and a satisfied customer score of 98%, the company firmly believes in organisation’s core value E.T.A. (Empathetic + Transparent + Adhering Commitment). The CEO Story Magazine has covered Stratefix Consulting as Company in Focus, 2020.

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