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Focus on the Positive

I am writing from London while undergoing self isolation in my apartment. I have not written since April primarily because I have nothing positive to write about. It has been a depressing start to the year of the metal rat, the first in the 12-year cycle of the Chinese zodiac.

Prior to my departure for London recently, I celebrated my 60th birthday in a small group (physical distancing) dinner hosted by Datuk Ho Kay Tat and Datin Linda Ngiam.

My two senior friends and I have gone through so many trials and tribulations in our almost 40 years of working life that we were unfazed with the oncoming recession and the unusual political instability in our country.

We all know that in due time, all these problems will soon be resolved and just as light follows darkness, we will eventually see the light at the end of the tunnel. Like you, we have no clue as to how long this dark period will last and how it will play out.

From experience, I can only advise that what is required right now is a positive mindset, always searching for the silver lining and making the best out of any situation that you find yourself in.

Entrepreneurs and senior corporate managers are experiencing some of the hardest time right now, worrying about cashflow, sales revenue and operation cost in no particular order as all these problems are inter related. Most external factors affecting your business are beyond your control, all caused by this invisible virus which has changed consumer behaviours and the business landscape dramatically.

What is within your control are the internal factors like your relationship with your stakeholders in the business that you are in.

Solve each problem separately, one at a time with each of your stakeholders and you will find solutions to some of your problems that will encourage you to proceed to the next stage.


Probably the biggest hurdle to overcome is when you see your cashflow drying up and banking facilities fully utilised.

If you have not reduced your operating cost since March, you are in deeper trouble now. The key presentation that you need to show your bankers is how you matched operating cost to lower sales revenue.

Nobody will buy your story of higher sales potential (most businesses anyway) so be realistic and humble.

Bankers normally would like to see shareholders inject additional equity into the business as proof of faith before they provide you with additional financing.

Unless you are too big to fail like AirAsia, you can ask the government to provide a government guarantee as requested by the commercial banks, which are majority-owned by PNB, EPF and Khazanah anyway.

For SMEs however, you will have to source for additional equity from your own pocket, partners and, if desperate enough, from outside professional financiers like private equity and family trusts.

Be prepared to part with some shareholdings. Just don’t go to Ah Longs, you will just hasten your business demise.

If you have a viable business, professional financiers will work with you through the next few years, thus providing financial stability over the most difficult moments.

In the meantime, work hard to convert inventory into cash, sell unproductive assets and reduce your operating cost.

You must match your operating cost to your reduced revenue.

Continuous losses will reduce your available cashflow at a faster rate and before you know it, you are insolvent.

If you have maxed out your facilities with your bankers, just remember it is also in the bank’s interest to keep you afloat lest you fall into the non-performing loan zone.

Bankers can be the most creative financiers if they want to help so it is advisable you spend some time convincing the bankers why they should keep you alive…. at least for another year.

Severe cashflow deficit problems might look insurmountable so it is a good time to have an indepth review of your balance sheet and business model:

Balance sheet – try to squeeze cashflow out of current and fixed assets. Be creative.

On the liabilities side, increase equity and you will be able to increase loans accordingly. Rebalance your loan portfolio. Short-term loan for short-term assets. Unless you can pay back, never use short-term loan for long-term fixed assets.

Business model – if you have been loss-making pre-Covid, I suggest you preserve your cashflow and temporarily close down your ops.

You may want to restart one to two years later based on the visibility of vaccines and consumer behaviours then. For corporations, refocus on core business and active cash conversion. Reduce your ego too because this virus do not recognise size nor past achievements.

Anybody can get infected.

If you have a business that is holding up well in June and July, be more aggressive with your promotions and make sure you turn your inventory fast.

It is like being the same fish in a much smaller pond but there is sufficient water for you to swim around and stay afloat.

If you have loads of dry powder and cash reserves/ unused banking facilities, this is a great time to look at new opportunities but do take your time and plan well.

Cash is king in the next 12 months so you can get some really good deals out there.

For those of you who have had a good run in the stock market, suggest you keep some reserves for many rainy days ahead.

Don’t believe analysts. They are as clueless as you are. Stay safe.

For those of you who received a pay cut (normally for those earning above RM4,000), the 10%-20% cut is not too bad. Just adjust your lifestyle to suit the new budget. You will still be able to put food on the table and have a roof over the head.

For those of you who have lost your job, if you are single, there are many options for you. There are many positive stories of people staying humble and getting any job that help to pay rent and their daily cuppa.

Lose the car if you do not really need it.

Grab is cheaper and you do not have to pay monthly installments.

If you are committed to an apartment, start looking for housemates to share the cost. It might affect your personal space but hey, you still own the space and you can keep the bankers at bay.

When all things fail, talk to your parents and family. They are always there for you.

Just remember these are extraordinary times and we old folks understand as we have survived hard times before.

Just stay positive. Like US President Donald Trump has predicted, the virus will eventually disappear. And he is right!


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