<![CDATA[Coronavirus: from coffee in Hong Kong to burgers in Malaysia and Ramadan in Singapore - here's how Asia's small businesses cope with Covid-19]>

As the coronavirus continues its spread across the globe, economists are warning that small and medium-sized businesses are shaping up to be its greatest economic casualty.

That is particularly worrying in Asia, where such firms account for more than 90 per cent of businesses and employ half of all workers.

Luckily, the region's entrepreneurs are a hardy bunch, not easily dissuaded from their dreams even when faced with what some people are touting as the greatest economic upset since the Great Depression.

Here are five case studies, taken from across the region, of how SMEs are adapting to the challenges posed by Covid-19 " and proving that even the smallest of businesses can have the biggest of hearts.

From being a full-time barista to selling espresso machines, Wong Yat-chun's life had always revolved around coffee. So when the young Hongkonger saw the opportunity to open his own coffee shop four years ago, he jumped at it.

"I had always dreamed of having my own cafe so I poured all my money into opening the shop," said Wong, 29, whose initial start-up capital was HK$1 million.

Since then, he has welcomed coffee lovers from around the world to his cafe, Why 50, in Sheung Wan and, until recently at least, business had been going just fine.

Wong Yat Chun's Why 50 cafe in Sheung Wan. Photo: Handout

"But in February, when the coronavirus hit Hong Kong, everything changed," he said. "Hongkongers knew that hanging out outside would increase their chances of getting infected, so most chose to stay home and away from the crowds."

Though there have been signs the infection rate is stabilising in Hong Kong, the city has extended most of its social distancing rules " including the closure of bars, gyms, beauty salons, massage parlours and karaoke lounges " until early May.

While cafes can still operate, Wong's revenue has fallen by about 50 per cent to HK$4,000 a day, and he expects things to get worse if the coronavirus continues to spread.

He said the situation had affected him far more than the anti-government protests that swept the city last year.

"During the protests, no matter which political side you were on, people were still coming out for food and drinks so there was still business."

He has brainstormed ways to adapt to the situation and keep the business afloat. He is doing more deliveries through mobile apps and is looking to expand sales of coffee beans, demand for which has increased as more people stay at home.

"As a small business, we can only go with the trends and try to adapt to the situation," he said.

Wong said he had received help from the Hong Kong government as part of its HK$137.5 billion package to help businesses and prevent job losses.

However, he added that businesses were always hoping for more help in the form of tax and rent relief.

He has also started to do more shifts at the shop so that he can cut down on the costs of part-time employees.

Women shoppers at the Ramadan bazaar in Singapore, one of the events on S-Lite's books. Photo: Reuters

Event management is a complicated business at the best of times. Throw in a global pandemic that can't decide whether it's dying down or flaring up in your particular neck of the woods and you've got a real headache.

Few firms know this better than Singapore's S-Lite Group, the multimillion-dollar firm that helps stage events including the Formula 1 Grand Prix, mass participation running events and, this year, the city's annual Ramadan bazaar.

The company has found that each time it tries to adapt to the city state's social distancing measures, the number of infections increases and new restrictions are brought in. First events were restricted to no more than 250 participants; then to no more than 10; finally the whole country was put into a partial lockdown that has now closed workplaces and schools.

"It's akin to being in a maze. We kind of know where we want to be, but, in this situation, the paths we would normally use end up in dead ends and we have to manoeuvre and renegotiate, only to find it's another dead end," said its chief executive Marc Lim.

Sporting events, including the Formula 1 Singapore Grand Prix, used to account for more than 70 per cent of S-Lite's business, but it has expanded into community events in recent years. File photo

Sporting events such as the Sundown Marathon and more recently the Formula 1 Singapore Grand Prix used to account for more than 70 per cent of its business. But S-Lite has in recent years also expanded into community events, festive decorations and the MICE space.

However, since the first case of Covid-19 was discovered in Singapore on January 23, S-Lite's normally lucrative business has taken a 90 per cent hit in February and March.

S-Lite helped put on the Singapore Airshow 2020. Photo: Handout

Particularly tough for the company was the cancellation of the annual Ramadan bazaar. S-Lite had spent S$300,000 (US$210,000) ordering lights and tentage for the event. Equally hard hit were the 800 vendors who had been hoping to sell a variety of Hari Raya goods, from snacks to traditional clothes and curtains.

"These guys who only sell their curtains or kueh once every year suddenly find themselves with nowhere to go," said Lim.

When the physical event was cancelled, the two-decade-old family business " started by former electrical contractor Thomas Ang " pivoted to an online model in an effort to keep the bazaar alive. It is now working with online retail platform B. Halal to run variety shows hosted by local celebrities to help vendors sell their products.

Lim said the initial plan was that vendors would be able to use the online platform to continue making sales after the end of the bazaar. Instead, the bazaar will now be entirely online.

"It is a good lesson for us in the events industry that nothing is forever and it's always good to have a plan B," Lim said. "The pivot to doing stuff online can be a value add for our event and complement what we do in physical space."

Chin Ren Yi, who founded myBurgerLab with friends Cheah Chang Ming and Teoh Wee Kiat. Photo: Handout

As Malaysia enters the sixth week of a partial lockdown that has banned dine-in custom at restaurants, social restrictions are taking a big bite out of the profits of small home-grown operations like myBurgerLab.

The eight-year-old Americana-inspired Malaysian burger chain, wildly popular for its gourmet smashed beef patties and ingredients like salted eggs, birds eye chilli and curry leaves, has six outlets, 70 full-time employees and around 200 part-timers.

So far, it has avoided retrenchments and pay cuts for ground-level staff, although management has had to take a 10 to 25 per cent salary cut "as a precautionary measure", with operations running on break-even only mode as its focus switches to online orders and deliveries.

Chin Ren Yi, who started the burger joint with friends Cheah Chang Ming and Teoh Wee Kiat, said the challenges to both the restaurant and the industry had come in phases.

"During the first two weeks of the lockdown, we were swamped. Thanks to our online presence on food delivery apps and branding, people found us to be a product they were happy to support and eat during the first weeks of the movement control order. But the challenge then was to find staff because it was a very uncertain time, there was a lot of fear going around, lots of our staff felt they weren't comfortable working."

When the government tightened the lockdown in April to limit travel and close businesses by 8pm instead of the usual 10pm, more challenges arose " last orders had to be made by 7pm "meaning we missed a lot of the dinner crowd and dropped below the break-even mark," said Chin. About 3,000 ringgit (US$680) in sales was lost daily.

Chin Ren Yi, who founded myBurgerLab with friends Cheah Chang Ming and Teoh Wee Kiat. Photo: Handout

The chain has responded with measures to drive sales like introducing a new line of breakfast products, including sandwiches and pancakes, and making take-home kits for people to buy raw ingredients and build their own burgers at home.

"We've also riffed off the very popular Animal Crossing game through our online marketing campaign, encouraging fans to build Animal Crossing versions of our franchise and we plan to show them off to the world soon."

The chain has also applied for government relief, although it may take some time for loans to be processed as "due to the lockdown we cannot get our money yet as lawyers need to be involved and they are not able to work at the moment, so that's a bit of a speed bump there", said Chin.

"We have also applied for the government's wage subsidy relief fund, we've got that and we're very thankful for that, it covers about 50 per cent of our full-time staff."

Chin said a recovery plan was on the cards, though the situation was hard to predict. The lockdown has been extended to May 12, and many expect further extensions to prevent gatherings during the fasting month of Ramadan or Eid celebrations at the end of May.

One of Thanapan Vongchinsri's Penguin Eat Shabu restaurants. Photo: Facebook

When the government ordered Bangkok's restaurants to close in late March to help stem the spread of the virus, Thanapan Vongchinsri had to act fast to keep his business afloat.

Thanapan, who owns the Penguin Eat Shabu buffet, had already closed two of his nine branches, but he knew that would not be enough.

So he asked staff to take leave without pay and set about working on a new, short-term business model.

"We used to have around 200 employees, but now there are 100 that are still working," said Thanapan.

He retained half a dozen members of the management team, but prepared them for the worst, instructing them "to talk to the bank early on about any debts they have, credit cards, home loans, car leasing".

Then he brought in the new business model. While restaurants were not allowed to open their doors, they were allowed to operate delivery services, so Thanapan realigned his operations and the responsibilities of his staff and tinkered with his menu to make it more suitable for deliveries.

Thanapan Vongchinsri (in white top) opened buffet restaurant Penguin Eat Shabu with his twin brother Thanapong more than five years ago in Bangkok.

Luckily for Thanapan, shabu-shabu, a Japanese hotpot dish that has been popular in Thailand for years, is relatively well suited to deliveries as the ingredients " raw meat, soup and sauces " can be transported easily for customers to cook at home.

"The branches were turned into a food factory to prepare shabu-shabu sets for home delivery. I myself also help drive the delivery car," said Thanapan, 36.

The delivery sets include a selection of Wagyu beef, pork and vegetables, along with shabu-shabu soup and sauces and prices start at 499 baht (US$15).

Shabu-shabu, a Japanese hotpot dish, has been popular in Thailand for years. Photo: Facebook

The gamble seems to have paid off.

For two days following the closure of Thanapan's restaurants, the company had zero income, but within about a week revenue had picked up, spurred by the popularity of delivery promotions like free giveaway of shabu-shabu electric pots. "We should earn around half of our usual revenue by April's end," he said.

Thanapan said his current business model meant his operations survived on minimal cash flow, meaning that he could avoid closing down for good. However, if the lockdown were to continue beyond the end of April " when it is currently set to expire " he would be faced with financial options that might not be workable in the long run.

"The SME soft loans have low interest rates only for the first two years," he said. "But for the third year onwards, interest spikes to 6-7 per cent and the condition is the loan cannot be paid back in under five years.

"Businesses have to find an asset, like a house, to guarantee the loan. Many small businesses will find this a major problem."

Sydney pub i Darts Zen was never a quiet place, even when it was subject to the late-night sales restrictions the city introduced five years ago to crack down on alcohol-fuelled violence. Still, when the laws were lifted in mid-January, it looked like business was going to take off in a big way. Party time, thought the bar owners. Even the unprecedented bush fires that were enveloping the city in thick smoke and slowing trading weren't enough to dent the optimism of i Darts Zen owner Eddy Lee.

But by March, sweeping social distancing rules brought in by the city to stem the spread of Covid-19 managed to achieve what neither the alcohol law nor the bush fires could achieve: silencing the bar's beer-loving, dart-playing young crowd. All pubs, cafes and restaurants in Sydney were ordered to close.

"One night we were trading, and the next day we were closed," Lee said. "In six to eight months, if we are all still locked down, it will be catastrophic."

Presently, three restaurants, a bubble tea maker and an independent grocer are cohabiting in the i Darts Zen basement, each of them operating takeaway services and taking online orders. The tea maker and the grocer moved to the basement in the once-thriving southern end of the Central Business District after giving up the leases on their previous premises because they couldn't keep going.

The bar's kitchen is now a "dark kitchen", a commercial operation that provides only takeaways via delivery cyclists.

This co-sharing arrangement means that the bar is now getting by with a 30 per cent slump in its revenue, rather than the 75 per cent slump it had been weathering in the previous six weeks. Lee has managed to keep all his 15 full-time, part-time and casual staff, though their hours have undergone a little nip and tuck.

It's all gone quiet: i Darts Zen. Photo: Internet

This was possible only after he claimed the City of Sydney council's Covid-19 A$10,000 (US$6,375) business grant and the federal government's Jobkeeper allowance, a wage subsidy for employers to keep staff on, and delayed all regular company and payroll taxes.

"Luckily we didn't have to send anyone home, but we have new challenges ahead because we have to rethink our marketing plan to get more customers when doors open again," he said.

Hospitality is among the industries hardest hit by the pandemic. According to the Australian Bureau of Statistics, three weeks after Australia recorded its 100th Covid-19 case on March 14, jobs in the accommodation and food services industry had fallen 26 per cent, the steepest decline of any industry.

The Night Time Industries Association, which spoke to more than 50 small venues in Melbourne, Sydney and Hobart, found all but one had stood down at least half of their staff since the start of March. About two-thirds had closed for good.

Lee, though, has a plan for when the good times come round again. He hopes to expand his customer base beyond students and younger clientele by offering local, traditional pub brews and a more "corporate" food menu to attract people from all walks of life.

It's hard work but Lee said he had no choice. Covid-19 was every young entrepreneur's nightmare, he said.

Despite having sunk all his money into the business, Lee, 32, is taking a philosophical view about its fortunes. He knows he is not alone.

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.