Small businesses have faced significant challenges as a result of the coronavirus disease COVID-19. These challenges include:
Across the world, many small businesses have found creative ways to survive this unprecedented coronavirus crisis. Some have even expanded their operations to take advantage of new market opportunities. For a detailed explanation to make businesses survive a crisis, check this site.
- Economic Disruption
The coronavirus disease 2019 (COVID-19) has caused a major economic disruption. It has disrupted the demand for goods and services and has also impacted employment and customer preferences.
Businesses that rely on travel-related revenue have been particularly affected by COVID-19’s impact, which has forced many to either close their doors or limit travel by employees. This has led to a drop in tourism spending and reduced revenue for airlines and cruise ships.
Small businesses are often very financially fragile, with little cash on hand to buffer even a minor financial shock. These businesses are vulnerable to permanent closure if the virus continues to disrupt their operations or if governments fail to provide them with the resources they need.
- Employment Disruption
Small businesses were particularly vulnerable to the impact of COVID-19, with many experiencing financial fragility. They were also more likely to believe that the crisis would last longer than they expected.
The impact of the disruption on employees was also significant. Medallia surveyed more than 3,800 employees and found that nearly 20% of workers were furloughed or laid off because of the COVID-19 crisis.
While the majority of employees are still in their current jobs, COVID-19 has disrupted workplace culture in unexpected ways. One major impact was the emergence of new, flexible work policies that were not in place before the crisis. Some of these policies may have included remote and telecommuting options.
- Customer Disruption
COVID-19 disrupted many aspects of customer experience, from how customers interact with a brand to how they get a product delivered. This change can be hard for companies to navigate, but it’s a unique opportunity to focus on data-driven empathy, a type of marketing that makes it a priority to listen and respond in real-time.
Disruption cycles are accelerating at a rapid pace, disrupting everything from virtualization to automation and digitization to real estate strategy and design. As they reverberate through business and culture, they are shaping a new socioeconomic period that AlixPartners refers to as the Novel Economy.
- Financial Disruption
Small business owners often rely on technology to help them navigate financial disruptions. For example, a lending app might help a borrower meet their credit needs, while an investment app helps investors invest their money.
But these technology companies don’t do much of the traditional banking operations. Banks issue loans, collect deposits and transfer funds.
However, financial innovation also poses systemic risks to financial stability. This conundrum has led to a number of debates around whether and how these new actors disrupt the traditional banking model, what type of regulation is necessary to safeguard stability, and how to best manage such risks.
In light of these considerations, this paper focuses on how the COVID-19 pandemic impacted small businesses and their outcomes. It provides a multi-dimensional analysis of the impact of the pandemic on small business outcomes and identifies alternative policy measures that could promote business and employment resilience in the future.
