The corona virus outbreak is causing a global health emergency and a global
economic slowdown. Followed by social distancing and nationwide lock-down,
businesses are experiencing their worse no matter how established they are.
The foremost challenge for businesses is to keep their financial wheels turning during
the lockdown period. Unfortunately, the impact on start-ups or small businesses is
much more brutal as they have scared cash reserves and a small margin for
managing the sudden collapse. On one hand, they want to continue trading as long as
possible but on the other hand, the health of oneself and workforce is top priority.
Small businesses are wondering what to do next. India, a developing country having
affect on its economy as well as in business sectors.
Small business is most vulnerable right now. The reasons are many; their size, scale
of operation, limited financial availability. They are trying best to cope up with this
worse scenario. The outbreak of COVID-19 has pummelled businesses world over,
with several sectors hit worse than the others. The lockdown implemented to
contain the spread of the disease has further left many enterprises cash-dry due to
the sudden pause in their revenue as economic activity has come to a standstill.
Decrease in the productivity
Small businesses globally are experiencing workforce disruption at an unprecedented
scale and speed. Virtually all companies are still determining how they will work in
the short- and long-term. But speed is of the essence has decreased. Workforces and
employees try to function and perform but productivity is not as much as it
should be due to struggling to cope with what is happening in the world.
Insufficient capital
Small companies are facing challenges in terms of obtaining financing in order to
bring a new product to market, fund an expansion, or pay for ongoing marketing
costs. They don’t have enough money to keep running or competing in the market.
Investors aren’t willing to invest money due to the ongoing situation. The total lockdown
has raised a question mark on the existence of many small businesses because these
are not firms that have too much cash to wait out the crisis.
Connecting with customers
The crisis is fundamentally changing how and what consumers buy and is
accelerating immense structural changes in the businesses. They are re-evaluating
how contact centers are leveraged, how employees deliver relevant customer experiences, where they work, and how digital channels can be used to support business continuity through the crisis and beyond.
Salary cuts
With this crisis impacting the small business around the country, it is creating very
challenging situations for the workforce. Companies are not meeting the revenue
targets hence, forcing employers to cut down their workforce.
Job losses and salary cuts are the only options left for firms to sustain their finances.
Businesses have seen a sharp fall in demand due to lock-downs across the country. If
the current global and domestic economic slowdown persist, it will impact demand
and realization.
But there are also some measures taken in favor of small businesses to prevent
them from this devastating situation.
The International Trade Center is closely following how the pandemic is affecting
MSMEs with a particular focus on those small businesses in developing countries. As
the only international organization fully dedicated to supporting the competitiveness
of micro, small and medium-sized enterprises (MSMEs).
Also, the Indian government has organized to give around Rs 1 lakh crore ($13 billion)
and focus on help for small and medium businesses weathering the corona virus
outbreak, to help them.
