By now you might be having a very clear idea about the devastating impact of COVID 19 Pandemic on the small businesses and global economy. The Recent crisis has forced Small and medium-sized businesses to stop their functioning. With the increase in the positive cases, many small businesses have become clueless about their future which may affect their revenue.
For the latest report, the US has asked places like restaurants, theaters, events, entertainment venues and more to close their doors until further notice. Because of that small businesses have started to feel the financial crunch due to the coronavirus pandemic.
From the latest survey by Bloomberg. Many small businesses are finding it difficult to survive for more than 1or 2 months due to payments like rent, loan payment, employee paycheck and more. More than 30% percent of the business may run out of cash and fail to operate after one or two months. Only 9 percent of small and medium-sized enterprises think they can survive for 6 or more months during the outbreak.
Due to COVID19 impact retailers have already started to face problems like supply chain issues (due to China), fewer customers, a decrease in sales and many more. Affecting hourly workers shift, job, paycheck and more.
According to a report by an analyst, due to the COVID19 outbreak, more than 15000 retail stores and small businesses may permanently stop their functioning. In a recent blog post, the economic policy institute said the COVID19 pandemic can affect more than 3 million jobs by this summer.
To avoid this you can take some measures to save yourself, your employee and your business. In this article, we have discussed how COVID19 is affecting small and medium-sized enterprises? And what precautions they are taking to save their business during the crisis?
Take care of yourself and people around
Before moving ahead we would like to tell you that not only your but every human on this planet is distressed about something. Some people are worried about their lives, some are worried about their business, job, family and many more. In a situation like this where COVID19 is growing rapidly thinking about the job & business future may amplify your stress level.
That’s why before making any decision about your business or job sit back and try to alleviate the stress and anxiety. Remember Until and unless COVID19 minimizes we have to protect ourselves from the unwanted pandemic.
It will affect human life, economy, revenue, and more but life is all about fighting. Once the effectiveness of COVID 19 reduces then every human on this plant will fight back to bring things on track. But for now, it’s important to secure yourself from the deadly and highly contagious disease “Coronavirus”.
Impact of COVID19 on small and medium-sized enterprises (SME’s)
With the increase in the number of coronavirus positive cases, small and medium-sized enterprises have already started to feel the impact on their business. Many are concerned about how they will pay the rent of the store? And provide the paycheck to their employees.
A recent survey found that 76% of the small businesses with employees between 0 – 200 have been hit by the COVID19 pandemic. Most of the retail stores and small companies have stopped their functioning. Because of that their cash flow has been abrupted badly. If you look at the stats, many small businesses working in the tech market have been hit badly in the month of March due to the rise in the COVID19 cases.
Due to the COVID19 pandemic, many companies are facing problems in paying the rent and other due amounts. Even if the landowner allows to defer the rent for two or three months, businesses may face difficulties in paying the due amount. These types of difficulties are forcing small businesses to permanently close their business. Until now no one knows how long this disease and its impact are going to last.
According to the Arkansas official, many people may lose their job because of social distancing caused by the coronavirus pandemic. They are expecting unemployment may grow between 8000 to 10,000. Mainly people working in a fitness center, retail store, salon, and more may lose their job due to the temporary shutdown imposed by the government.
Not only small businesses but businesses like the airline industry, cruise ships, hotels and more are hit badly by the coronavirus pandemic. Countries are not allowing any international flights to land and few countries have stopped their Domestic functioning. It is making it difficult for them to roll out the paycheck of their employees. Airlines have already started asking its employees to take the payout.
Due to demand shortfalls, many businesses have started to reduce the working hours of their employees which directly affects their paycheck. Large companies have already started to dismiss their employees considering the company will hire them back when the crisis ends. The government is working to get a solution for laid-off workers. Unemployed people can take advantage of unemployment insurance to fulfill their basic needs.
Most of the theaters across the world have closed their door which is making it difficult for them to pay the loan and rent. Due to social distancing, almost every country has instructed theaters to temporarily shut down it’s functioning. The sad part is that no one knows when they are going to restart their functioning.
Problems faced by small and medium-sized businesses
According to recent research by Goldman Sachs, more than 50% of small businesses said due to the lockdown they may fail to operate their store for more than three months without earning. If you look at the given stats, then more than 40% of the small businesses claim that they may permanently shut their functioning due to the cancellation of many fairs/events. 8.4% say that they may stop their functioning due to their own production loss.
A report from Slyvester Smith states that Businesses are failing because more than 23% of the retailers are failing to fill the stock due to the supply chain issue. 9% of small businesses are failing to meet customer requirements due to the shortage of employees. COVID19 has badly affected small businesses.
Many states in the US have already directed stores to close or reduce their business functioning. Gov. Andrew Cuomo in New York asked the non-essential business to close their doors. During the interview, he stated “We’re all under quarantine now. We’re all in various levels of quarantine and it’s hard,”. Leaving supermarts and medical shops almost every store has stopped working including restaurants.
COVID19 pandemic has impacted the restaurant’s income streams badly. Many countries have asked them to discontinue their site down customer service until further notice. To maintain social distancing restaurants have started to deliver the food online or pick up service. But with the increase in the coronavirus active cases, people have started to avoid the restaurant’s food due to hygienic issues.
From the recent report, US restaurants can lose $225 billion due to coronavirus pandemic. However few restaurants are saying that they are seeing a surge in the pizza & pasta demand. It could help the restaurant to pay their staff bill (hourly basis) until the crisis ends.
A survey found that 5% of businesses are claiming that COVID19 did not impact sales, instead, they are seeing a growth in their revenue. Due to the sudden rise in demand businesses like the grocery store, medical store, online food delivery, and streaming platforms have started to get stronger sales.
Precautions taken by small and medium-sized businesses to tackle COVID19 losses?
Many people are failing to save their business due to the lack of knowledge of the current situation. Today the government is taking all the steps to save human life, their economy, and small businesses.
In the recent report, NFIB stated that more than 60% of small businesses are taking all the necessary actions to save their business from COVID19 disruption. Only 6% of the small business has not taken any steps in response to the recent crisis maybe because they are more worried about COVID19 impact or their bank balance is strong enough to survive for more than 6 months.
They are offering various solutions that will help you to save your business. Here are some tips and information that will help you to know more about the action you should take to protect your business:
Recently in Asheville, a website called Asheville Strong is joining hands to help the local business hit badly by the coronavirus pandemic. They are asking consumers and frequent buyers to buy the gift card in advance which can be used after the crisis ends. Very few people know that small businesses often struggle to maintain cash flow during normal days. so, you can imagine the impact of COVID19 on small business revenue.
Buying these gift cards will help small businesses to survive during the unwanted economical crisis. Yes, it’s true that no one knows when the impact of the pandemic is going to end but we should think of small businesses and take some initiative to help them.
To fight back many businesses have started to offer online delivery or pickup service to cover their rent and employee fess. However, due to the drop in the customer demand businesses are failing to pay their basic wages.
Many small businesses are dependent on the assistance provided by the governments in the form of a financial aid package. Recently the federal government has proposed a new emergency package where they have allocated $300 billion for loans to help small business owners during the crisis.
According to the new aid offered by the government of different countries, small businesses will be making their tax payment in the month of June or July. But by seeing the recent recession most of the small businesses will be in the middle of the and may fail to make the tax payment. The National Taxpayers Union Foundation stated that the delay in the payment of taxes may go a long way which will alleviate the COVID19 recession.
How the U.S. is helping Small businesses to survive in recession?
According to the recent report, the Trump administration may increase the amount of low-interest loans offered to businesses struggling to run during the pandemic. Through, Small Business Administration(SBA) business owners can use low-interest loans to pay their debt amount, meet payroll, and pay other bills. Still, there is one confusion in deciding what type of business will get included in the new aid policy.
Even after the aid, many businesses think that they may fail to pay the rent and employee fee if they don’t start working soon. So to avoid that the federal government is taking all the necessary steps to provide flexibility on payment collection from small businesses.
Heritage Foundation is helping small businesses to avoid layoff by offering “epidemic tax credit” which will assist small businesses to manage their income and offer paid leaves to their employees.
So, you can use the aid offered by the federal government to help your business survive during coronavirus pandemic. Many businesses have already started to apply for a low-interest loan for up to $2 million. NAd the treasury department may postpone the deadline for paying the annual takes depending on how long the pandemic lasts.
Facebook also offered $100 million to help small businesses as the government has asked theaters, gyms, and other entertainment places to close their door to slow the COVID19 pandemic effect.
How small businesses are handling paid leave issues?
From the recent survey by Bipartisan policies center (BPC), almost every business with employees between 0 – 50 is failing to provide the paid leaves to their employees. Mainly businesses, where the employee can not work from home, are facing difficulties in getting their paycheck.
Many governments have asked private companies to offer paid leaves to their employees. But business is saying that without employees it will become difficult to manage the business. And they may face major financial break down if they start offering paid leaves. Because there are businesses where work can be carried out from home.
The family’s first Coronavirus response act passed by the House of Representatives and supported by President Trump states that businesses with less than 500 employees have to offer paid leaves to their employees. The tax credit can help them to cover the cost of the paid leaves.
Conclusion
Due to the recent COVID19 outbreak, many small and medium-sized enterprises are going to face cash flow. During a difficult time, our government is taking all the necessary steps to help all types of businesses to survive in the industry until the effect of coronavirus pandemic reduces.
Many stores have stopped their functioning with the uncertainty of returning back in the future. If you are among them then read and try to gather all the information about the aid offered by your country’s government. Make use of the aid to mitigate the losses your business is facing and help your business and people around to survive until the impact of unwanted COVID19
Frequently Asked Questions
1. Is the coronavirus disease more severe than the seasonal flu?
Yes, with the new numbers we can say that the coronavirus pandemic is more severe and contagious than seasonal flu. Our immunity can fight with the seasonal flu but finding it difficult to fight with coronavirus. Mainly the immunity of older citizens or pre-existing medical conditions patients are facing difficulties in fighting with corona.
2. Can you contract coronavirus disease by touching a surface?
COVID19 can’t be transmitted through the air but if you come in contact with the virus through any object, surface or human then you may get infected with coronavirus disease. That’s why doctors recommend not to touch eyes, nose or mouth and keep sanitizing hands.
3. What are the symptoms of Coronavirus Disease?
In the initial stage, your body may show symptoms like dry cough, fever, body ache, breathing difficulties and headache. If COVID9 grows then your body may start showing symptoms like pneumonia, SARS (severe acute respiratory syndrome), kidney failure and lastly death. You should know that in the initial stage most of the people fail to recognize the COVID19 and it takes 3-14 days to show the fully developed symptoms of coronavirus. So, if your body is showing any initial stage symptoms of COVID19 then it’s recommended getting the treatment as early as possible.
4. What should you do if you think you have coronavirus disease?
If you are suffering from high fever, facing difficulties in taking a breath and dry cough then it recommends consulting the doctors. Don’t panic, it’s not necessary that you will be infected with the coronavirus disease. Most of the time these things happen due to the flu. However, if your body is showing symptoms of COVID19 then contact the nearest hospital and get it tested for positive or negative.
5. How can I care for a family member with the coronavirus disease at home?
The first and foremost thing we would recommend is self-isolation. To keep your family safe during pandemic try to avoid meeting outsiders and sharing foods and drinks. If you have any older parents at your home then provide them with all the necessities like a clean disposable mask, sanitizer, and a clean environment. Because older people (50+ age) are at higher risk and even if any of your family members have a pre-existing medical condition like asthma, diabetes, then try to secure them.
6. How do you disinfect the surface for the coronavirus?
You can use household bleach, a solution containing alcohol (70%) and sanitize your house to disinfect coronavirus from the surface. Clean your hose surface daily and for a while don’t allow any outsiders to visit your place. Even if you allow close relatives or friends inside your house then ask them to open their shoes outside and wash hands.
7. What can I do to prevent the coronavirus disease at home?
Prevention is better than cure, tell your friends and family to go through all the safety measures to protect themselves from the deadly COVID19 pandemic.
- You can avoid getting in touch with the people suffering from any flu
- Don’t go outside to meet people
- If you are sick stay at your home and stay away from your parents
- Clan all the objects you use frequently like your cupboards, cloths, switch and more.
- Wash your hands frequently
- Wipe your home surface daily with household bleach
8. Can antibiotics treat coronavirus disease?
According to doctors, antibiotics don’t work on coronavirus disease. So don’t use any antibiotic to treat coronavirus disease because it is a virus with no vaccine in the market. if you are coronavirus positive then consult doctors about the necessary steps and medicine you need to take during your treatment.
9. What should people at higher risk do during the outbreak?
If you are facing an outbreak in your community then we recommend you sit at your home, take all the necessary prevention measures to avoid the outbreak. Do some research on the symptoms of the outbreak and very important identify how the outbreak is spreading it is airborne or community spread. If you find yourself sick, don’t panic, contact any doctor and try to identify whether you have been infected by the outbreak or not.
10. Should I have contact with my pet if I have coronavirus disease?
Many people are afraid that COVID19 spreads through pets. From recent research, There have been 0 cases of COVID19 transferring from pets to humans. So don’t get afraid you and your pet are safe. But if you are Coronavirus positive then we recommend you to ask any other family member to take care of your pet. Don’t come in contact with your pet and always wash your hand before and after touching your pet.