The impact of COVID-19 on small businesses worldwide was catastrophic, and businesses are still struggling more than a year after the onset of the pandemic.
At the height of the crisis, businesses in developing nations were particularly affected, with sales falling by 70%, compared to only 45% in OECD countries.
The COVID-19 pandemic has forced thousands of small businesses across the country to close their doors. Transport and border restrictions, social distancing, and lockdowns have caused supply chains to be disrupted, consumer demand to be depressed, and cash flow to be reduced.
The outcome is that many small businesses cannot pay rent, employees' wages, suppliers' invoices, and creditors' debts causing a downward cycle in household finances and the economy.
These companies include restaurants, bars, coffee shops, barbershops, beauty salons, retail stores, and more. While some businesses are attempting to get back on their feet, many are on the verge of ceasing operations.
It is pertinent to note that small businesses are the backbone of every economy, making them vital to every nation. This is why small businesses, many of whom are still grappling to find their way up, need all the support they can get.
1. Make a change in your buying preferences
People frequently purchase items from well-known brands rather than from small businesses, although these little enterprises provide high-quality goods and services.
These consumer purchasing trends impact small businesses, and the current situation many of them find themselves in, due to the COVID-19 pandemic, pushes some small businesses to shut their doors.
Keep in mind that while you're considering purchasing that bag, shoe, or whatever it is you are looking for from a major retail store, you should also consider supporting the small businesses in your neighborhood.
In a time like this, when the pandemic has altered our way of life, the most effective way to assist small businesses is by purchasing from them. You would be surprised by the fact that many small businesses offer better quality goods than many big brands.
We must remember that the cheapest choice is not necessarily the best choice. Moreover, as compared to large businesses, small businesses may provide unique items, a more personalized experience, and excellent customer service.
2. Spread the word
Whenever you shop at an SB, make sure to follow them on social media, promote their content, and give positive reviews. SBS often rely on internet word-of-mouth to survive. If you admire the work of another SB, make sure to let them know about it on social media platforms.
This action will cost you nothing, and it may save the other company from going out of business altogether. The amount of organic traffic or lead conversions that one great post may generate for the receiver is impossible to predict—and they could even return the favor for your own SB.
Encourage yourself to participate in at least one SB shout out each week, whether it's for a local coffee shop, a barbershop, or an online artisan apparel company.
3. Referrals based on word of mouth
Over the years, word-of-mouth recommendations have helped numerous small businesses grow, including many well-known brands we know today. When a friend, colleague, or family member recommends a product or service, people are more likely to trust the brand in question.
Don't underestimate the power of word-of-mouth marketing to spread your message. Inform your friends, family members, and co-workers about your favorite SBs and encourage them to make purchases from these SBs on your behalf.
This will go a long way in helping SBs as their online presence is usually very low, and this is often spikes because most people tend to be cynical when it comes to doing business transactions with SBs online.
So, tell your friends about the beauty salon, barbershop, restaurant, bakery, and a slew of other SBs in your neighborhood that you discovered.
4. Add more small business to your supply chain
If your company relies on a network of vendors, look for opportunities to expand your supply chain by partnering with small businesses.
According to Rohit Arora, CEO of Biz2Credit ® , due to the COVID-19 failures, 15 to 20 percent of small company vendors are experiencing late payments from the bigger businesses that utilize them as suppliers, according to estimates.
SBS, who rely on that cash flow to pay their employees and keep the lights on, would suffer significantly due to this delay—working with SBS offers a realistic approach to alleviate this issue as an SB owner yourself.
As a restaurant, you have the option of stocking your pantry with goods from a corporate vendor or sourcing ingredients from local purveyors, such as farm-grown vegetables, meats and dairy, and small-batch bakery items, instead.
Even if you cannot restructure your food procurement, you may engage with a single small business vendor for a specific item, such as morning baked goods. You may also outsource a portion of your job to SBs if you are in events management or any other type of service business.
5. Offer financial support
Entrepreneurs and company managers are in a unique position to help other small business owners and managers succeed. So please don't underestimate the importance of your support, whether it's in the form of a monetary donation, word-of-mouth recognition, or a mutually beneficial relationship.
Consider starting a fundraising campaign, volunteering to put up a booth or sell items at a flea or farmers market, offering your professional talents, or helping to plan an event to promote small businesses in your neighborhood if you recognize that a shop near you is struggling.
If you can, assist small businesses looking for loans or grants; if you cannot help monetarily, you might be able to assist them in researching loan or grant-giving organizations online.
When in doubt, ask SB owners what they require and how you can assist them. And keep in mind that the COVID-19 pandemic has been brutal for both small companies and customers, so a little kindness and empathy may go a long way.
What are the challenges faced by small businesses?
While the effects of the COVID-19 pandemic on businesses might vary substantially depending on the sector, region, and business strategy of a particular firm, it is apparent that companies all around the globe are confronted with a challenging scenario.
Below is a breakdown of some of the challenges facing SBs:
1. Financial strain
Cash flow issues arising from falling revenue and operational difficulties also resulted in difficulty assessing working capital for many small businesses.
2. Psychological stress
Some business owners find it difficult to adjust their mentality to the current issues at hand and manage their anxieties, personal stresses, and concerns about the future.
This makes it difficult for business owners to deal with the anxiety and stress their employees also go through, and, not just that, making future plans can become a bit of a problem.
3. Failure to meet sales quotas
Lockdowns, movement restrictions, and social distance requirements have made it impossible for businesses to physically access their consumers since shops and offices have been shut down.
In addition, as the economic shock spreads across the population, customers are altering their spending patterns to reduce their expenditures on non-essential products and services such as clothing and entertainment.
4. Difficulty accessing grants and loans
Although some businesses could get COVID-19 relief funds and grants, some other companies are yet to get donations and loans. While some are still waiting to get these loans, others have been forced into closing their doors.
5. Challenges in the workplace
Many businesses are struggling to securely accommodate their employees in the workplace because of social distancing standards, which are causing operational difficulties.
In addition, the absence of remote work plans in place, before the pandemic, has caused many businesses to experience difficulty transitioning to this mode of conducting business and managing operations from a distance.
6. Low consumer demand
As a result of the state lockdown, social distancing, and other COVID-19 restrictions, many SBs have been forced to shut their doors due to low customer demand.
Even though some businesses are beginning to see a boom in their customer demands, so many others are still grappling with the problem of low customer demand.
7. Little or no provision for remote services
Many businesses took to Remote Services as a result of the pandemic, businesses with low online presence suffered a great deal, and some SBs are suffering a great deal as a result of this.
How can owners help their businesses recover from the pandemic?
While individuals and customers help SBs recover from the pandemic, there are other ways these businesses can help themselves recover.
Here are 5 ways SB owners can help their businesses to recover from the pandemic:
1. Plan Ahead
Creating a strategy is always the first step in any business endeavor. However, before you can begin to plan, you must first answer the questions; What exactly does your consumer base need?
Are their needs feasible for your company to accomplish? By determining your customers' needs, you will be able to devise a strategy for meeting those needs efficiently. You may be able to continue delivering the same items or services to your consumers while just altering the distribution methods or marketing strategies that you now employ.
The question then becomes what to do if you do not believe that your company is directly equipped to meet the current demands of your consumers. This is where you may use your ideas to create changes to the services you offer.
2. Get Online
Several businesses suffered the bane of not having an online presence during the pandemic. It will be beneficial to have an online presence to ensure your business gets to your customers and prospective customers.
It is always beneficial and necessary to examine various ways to offer your services or distribute your products. Here are a few other ideas to consider:
- eCommerce – whether you give a comprehensive eCommerce offering with all of your products and services or choose a few things as a proof of concept
- Virtual Tours – provide the sense of visiting your business without having consumers on location
- Virtual Consultations – video meetings or phone conversations are an excellent method to interact and imitate an in-person meeting
3. Apply for business small business loans
Many SBS may want more money or capital to expand or maintain their operations regularly.
When all other options for obtaining funds for your business have been tried, the best option is to consider taking out a business loan to supplement your cash flow.
In addition, SBS who have suffered losses due to the pandemic may be eligible for low-interest loans to help them continue operating their businesses.
4. Promote your business online
As an SB owner, you can promote your business's visibility online by paying for targeted advertisements or using social media influencers to promote your business online.
Some of the ways you can achieve this are via sponsored ads on Google ® , Facebook ® , Instagram ® , Twitter ® , and other online platforms.
5. Maintain a minimal cost of operation
Shortly, expenditure and expense management will be your primary concerns. First, you must limit expenditures to a bare minimum until your team is back on track. Second, you can't anticipate total productivity because it will have decreased naturally due to the pandemic, so maintain the same output level that you have been carrying for the last year to keep expenses at that level. Third, having your employees work from home helps you to keep your expenditures low. Fourth, speak with the landlord of the office building about lowering the rent.
WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.