There is a lot of speculation about the depth and severity of the economic downturn caused by the measures to combat COVID-19, namely social distancing and lockdowns. Everyone is debating about which corporates will be worst affected and which will manage to avert disaster.

Let’s look at what are the danger zones and how we can avoid becoming economic victims of the pandemic.

Low-debt businesses will survive

Those who have minimal debts or loans on their balance sheets will be the winners. With no business happening during the lockdown phases and demand falling across the board (except for essentials), there will be (and already is) a severe debt repayment crisis. Since most businesses are not earning any money, they will be hard-pressed to make good on repayments and interest payments of their loans. The most debt-laden companies will be the first to go under.

Healthy Reserves will be a boon

Businesses that have ample reserves in hand to tide over these trying times will come out tops. Those businessmen who have had the foresight to plow in their profits over the past few years, and have kept improving their reserves, can now use it to finance the company when there is little or no revenue.

A New World Order

It is the beginning of new world order. Most of the developed countries and economies have suffered drastically, and it will be tough for them to make a comeback soon. In contrast, countries that have tackled the pandemic successfully will be in a better position to reverse their fortunes.

Businesses which will adapt to the new scenario

Quick and agile enterprises that can adapt to the unique situation and cater to the new demand will be able to make it. Some will make a fortune out of the opportunities which will present themselves due to the effects of the pandemic.

Those who innovate for the new environment

Yes, there will be plenty of innovations, new creativity, and ideas. And those who manage to execute and market these new ideas and products will be the ones whom we will see as top multi-national corporations in the coming years. Those who can play the game well will be great winners.

Essentials and basics

Food, clothing, and shelter and a host of other necessities will do very well since people will prefer to stock these so that they don’t suffer in case of lockdowns or situations when they are not able to go out and buy them regularly.

Corporates who collaborate

Collaboration will be the new buzzword in business. Those businesses which manage to collaborate to stay afloat will be the ones who will rise out of the chaos in the long term. Companies that use each other’s strengths to overcome their weakness and form new mutually beneficial alliances will be the ones who can beat the downturn.

Information Technology Industry

The computer industry will see a boom, and those embracing the online business and online culture will make good money. More and more people will prefer to own computers so that they can play, work, or generally interact with their friends and family online. This will see a massive surge in demand for information technology.

Thank you for reading this post, should you have any suggestions or feedback, please feel free to share your thoughts in the comments below.