Small Businesses Post COVID Where Are They?
Small Businesses Post COVID WHERE ARE THEY?
COVID-19 has single-handedly destroyed the world economy and has affected the livelihoods of millions of people globally, making it the biggest crisis since WWII. Small businesses have suffered the full brunt as over 40% of businesses were forced to close in the initial stages of the pandemic. Others temporarily closed, citing a reduction of demand for products or services combined with employee health concerns about their well-being while at work.
Government Initiatives
Most governments around the world recognized the short-term economic contraction where startups and small businesses were affected, forcing millions of people out of work in one instance.
To ensure that many did not depend on government relief, most governments have taken steps to offer incentives to businesses in the form of loans and grants to ensure businesses do not close. These loans have benefitted small businesses greatly by ensuring they stay afloat or use them to start other businesses.
Modernization of the Economy
The biggest lesson that small businesses learned is the need to push for the modernization of the economy to safeguard their businesses. Working a few business days is seen as positive today, with businesses previously reporting four workdays as a drop in income and suffering a loss for the remaining day.
Now the shift is to embrace and maximize the workdays making for a much happier workforce. The result is a more stable business, with many reporting to have taken the extra day as an extra weekend to focus on other business endeavors, reducing business burnout.
Demand Growth
Small businesses are also letting the economy guide them. Most businesses are taking the safer approach and gauging local demand instead of aggressively marketing, hoping clientele will start trickling in.
This approach is considered the survival mode of the business as all plans to grow the business are paused. The business then focuses on meeting the demand of a loyal customer base, making it an economic-driven demand shift.
Although the slow pace of the business is temporary, many have been able to survive the lack of demand. This has been achieved by operating at a bare minimum while waiting for the economy to recover significantly before operating at full capacity.
Change in Business
Small businesses’ presence in the economy means creating jobs for most people. However, the pandemic essentially eliminated most leisure jobs in the market as demand ceased to exist. Businesses worldwide reported a substantial negative impact on the business, with only 50% having enough to
survive for three months without generating any income.
The only option business owners had was to change their businesses and switch to producing items in demand. Some even settled for preventive materials such as face masks and sanitizers.
With the necessary approval, some also started producing materials used by first responders in the health industry. This was a survival tactic to survive and get a livelihood while planning their next move.
Today, most of those businesses that adapted by changing their business entirely are slowly going back to their previous business setups. Many more are looking for better alternatives as the fear of losing income is greater than the passion for the previous business.
Permanent Closure of Business
Traditional businesses dealing with specialty luxury items are some of the businesses that have been hit hard. Management in such businesses is usually advanced in age and lacks the technical know-how how to continue or even change the dynamics of the business.
Lack of knowledge on connecting online with customers is the major setback in operations. Unfortunately, it worsens, especially if the businesses are operated by the elderly. Coronavirus poses a lot of danger to the elderly. Businesses operated by this group and requiring their ever-presence and face-to-face transactions have been forced to close indefinitely.
Partial Operations Takeover
Small businesses working to supply and deliver certain goods have salvaged some parts of the business and made it their primary business. With the previous product unwanted, shifting focus on delivery keeps the business afloat without additional debt. The businesses could
then safely take on the delivery part of the services and make it their main service.
The result is immediate as the entrepreneurs gave another lifeline to the business and filled in the gaps that the pandemic created. Getting funding to expand the secondary service worked well. Some that had too much to make the business survive found it hard to raise the capital to change the business’s main focus. However, most have managed to create an alternative by starting up small with close companions and working with referrals
to get more venture opportunities.
Appreciating Emerging Opportunities
COVID-19 clearly showed how a crisis could create a challenge for businesses that cannot maneuver. Today entrepreneurs who completely shut their businesses together with those that adapted to changes appreciate the need to take on numerous business strategies.
According to studies, the main strategy now is to focus on essentials even when the purchasing power is low. The easier the business demonstrates its ability to replay various responses and effectively deal with crises, the easier it is to start up and access broader emerging opportunities.
Loss Of Business
Small businesses that mastered the art of online marketing pre-pandemic experienced a big difference in consumer demand for products. Small firms that dealt with a few clientele lost access due to the inability to source raw materials, a problem that brought about the closure of international markets.
With quality suffering as the business sought to spend cautiously, the customers avoided products and services, leading to job losses. Today companies have had to work extra hard to regain the customer base previously lost. It’s harder as some supply chains have been lost forever with no place to source raw materials.
Starting production from raw materials is an opportunity many firms have taken. Shifting from making the end products if there is a big gap has made
it easier for small businesses to get back up and running.
Future Of Small Businesses
The challenges experienced by small businesses and the journey to adapting to the crisis created new challenges and many opportunities
simultaneously. The challenge of getting to customers forced businesses to start operating online. During the pandemic, the internet became the lifeline of many businesses, ensuring that they remained afloat.
Although before the pandemic, small businesses had started embracing advertising, bigger, popular brands were still dominating the field to reel in more consumers. Today, businesses report that most orders are done digitally and online, even after quarantine. People take more time choosing their goods in person, and when they decide, they do so and order online.
