China Business in times of Coronavirus, an entrepreneur's lessons from SARS

I launched my own accounting and management consulting firm in Beijing in March 2003, with no resources but my personal savings, my experience and my reputation as a tax expert. I had been in China since 1991, had done my law Ph.D. on the opposition of Chinese business culture and regulations, and had been blindsided by the reality of business in this country on a daily basis for 10 years. I thought I had seen it all. Would China become boring? Fear not, this is the country that always has something in store for you. Enter the SARS Crisis. 

At the very beginning, the panic, the empty streets and the general "Walking Dead" atmosphere of Chinese cities were keeping everyone on an adrenaline rush. You would never see that in Western countries with less population density and different hygiene standards. Getting together in the deserted city or foreigners giving away their possessions before the roadblocks that were sealing the Capital off from Hebei was like scenes from a Tarkovsky movie. A few weeks of this, with no business meetings and no income, while expenses were keeping their steady pace, and I was getting nervous. Who would not? I had a quickly vanishing lump sum to get my firm off the ground but there was no business at all to keep me from going bankrupt, and nothing to come save me in the foreseeable future either.

"Illness is the great equalizer" (Fran Drescher)

In the weeks leading to the SARS Crisis, I had met a large number of new competitors, young foreign entrepreneurs establishing small accounting and consulting firms. At that time, there was space for all of us, enough growth to feed all our ambitions and the race was to who would build the best, biggest or most profitable business. The young alumni of the Big 4 had the clients referred to them by their former managers, I was building my business one account at a time, but everyone would be able to thrive. A few weeks into the Crisis, the rules of the game had changed. It was about who would live to see another day, at least in terms of business. At the end of the Crisis, businesses had closed, a large number of foreigners had left China, many an entrepreneur was considering going back to the stable income of a normal job in a multinational company. 

As usual, darkness is the deepest just before dawn. The market bounced back and from 2005 to 2008, those who had survived the SARS Crisis thrived. This is the first teaching of this period as far as I am concerned. Hang on and bide your time. The market will pick up. The People's Republic of China has a quarter of the world's population, and even when things go sour, foreign firms leave, the Chinese government shuts down the economic activity, the potential remains. There is no way that a sanitary crisis will stop the march of history. If you are still on the market when it bounces back, your resilience will pay.

Of course, the SARS Crisis was a terrible time to be an entrepreneur, just like the Coronavirus is bound to be one. Of course, you will have to slash costs, reduce your burn rate to the bare minimum and reconsider all unnecessary expenses. However, this time of reduced activity is also a time for introspection that you will not be able to carry out otherwise when business is booming."

"Be strong and you will be renewed" (Logan's Run)

This is a time to innovate, rethink your practice and come out stronger. During the SARS crisis when it was almost impossible to get in-person meetings, I realized that I was not the only one facing this predicament. All the company bosses had left yet still had to manage their companies remotely and maintain control of their Chinese teams. This is when I had the idea of the first version of Kwikdroid, a multilingual, secure, online management platform that, to the best of my knowledge, is the only one that is fully compliant with the Chinese regulations. The first adopters included firms from sectors as diverse as logistics, legal services, management consulting and agribusiness, with managers located in the US, Europe and other Asian countries. With Kwikdroid, the language barriers disappeared. The Chinese teams enter, for example, their purchase orders, time sheets, expenses or inventory movements in Chinese and the foreign managers review and approve remotely in French, English, German or their language of choice. The power to remotely control a complex business and to have perfect transparency also proved to be a great tool for disaster mitigation and recovery. I am certain that Kwikdroid users will find it very convenient for their teams not to have to potentially share viruses in the office when things can be done faster, more easily and without contact.

"Fortitude is the marshal of thought, the armor of the will, and the fort of reason" (Francis Bacon)

The key really is to stay physically and mentally healthy, not to despair and not to abandon the struggle. In many cases, you are an entrepreneur not because you saw this as an opportunity to make better money than with a regular job, but because you wanted the experience, because you were yearning for a fight. There you have it! No better time to let this side of your personality run wild. Resilience is key. It is your fighting spirit that will make all the difference, and such a crisis gives you the right arena to show all your gladiatorial skill.

When the dust settles, you will see that the competitive landscape has changed dramatically. Some of your most frightening competitors will have disappeared, not because they did not have a good business model or the resources to weather the crisis, but because they chose not to do so. They chose to go extinct. For the real entrepreneurs, a crisis, sanitary or otherwise, is an opportunity to be this seedling that survives a forest fire. The competition is gone, it is your time to shine.