The COVID-19 breakout is the biggest pandemic of the century. The outbreak has interfered with the normal lifestyle and has also caused a financial balance worldwide. The economy of multiple countries is suffering due to, and the worst effect is on small businesses. These businesses have lost both their savings and their clients. Many small business owners are on the verge of bankruptcy and don't even have enough resources for loans. This post will show you how bad things are for the small business and the ways to empower them.
Effect Of COVID On Small Businesses
The small-scale business and the in-house businesses have lost a considerable amount of customer base due to the social distancing and lockdown around the globe. Their staff has reduced, which further restricts the amount of work they can handle. The expenses, on the other hand, are now much reduced. They still have to pay all the bills, including the business setup, rents, electricity bills, and more. They still have to pay for the salaries of their members. All of these factors are cutting their profit margin and the funds making their businesses suffer. About 43% of the business's owners have shut their companies due to the outbreak, 39% shut right from January.
Stat says that the mid-Atlantic region alone has witnessed a drop of businesses by 54%, including an unemployment increase of 47%. Even the evergreen freelancing businesses are becoming difficult to handle. The agencies and people using freelancing as their income source feel it difficult to find enough work. To make things worse, the government of some countries like India has also decided to add taxes and GST to their income, which further eat up their income but a considerable percentage. In short, things are bad and turning worse for small businesses all over the globe. The COVID pandemic is eating up their profit and leading them to bankruptcy and shutting.
How To Empower Small Businesses?
Increasing the customer base and bringing more business at the time is not a very good strategy, especially with half of the world still on lockdown. However, providing some relief can help empower small businesses. The following are some ideas that both the government and people can use to help small business owners.
The small businesses often stick to regional provinces and are not much on the radar for large scale companies or governments. Bringing them to light can help raise awareness of their suffering and find solutions for them. One of the recent examples of this part comes from the Indian state of Delhi, where a YouTuber shared the video of a small restaurant owner feeling unable to sustain a daily livelihood. The video went viral, and soon the owner had support from multiple large companies like Paytm, Airtel, and many others. Its increased customer base and awareness saved the business that was on the verge of shutting.
The problem here is not the pandemic itself but the effect and lockdown its causing. It means that you don't need to shut your firm but find a way to provide your services without direct contact. For instance, let's say you won a small shop that sells grocery items and cannot get customers in lockdown. Then move towards the home delivery systems. The customer may not have access to your shop, but they still need the grocery and will be willing to order it online. It's a big step for large businesses, but it's progressing is the only way to sustain in the modern world. It's not that tricky; many large-scale companies are willing to support small businesses in this aspect.
The bills, rents, and other payments are one of the biggest problems for small business owners. They are shutting their businesses to prevent these extra expenses during the lockdown. However, it doesn’t have to be that way. The government of each state can start their program and provide relief for these expenses. They can extend dates for bills and reduce the interest rates. Including policies for collateral-free loans and credits can also help small businesses to get a headstart.
The COVID pandemic has hit everyone differently. Some are taking advantage of it to get away from the hassle of life, while others are less privileged and have a financial crisis. The only way to deal with the problem is to come together and help each other. If you are privileged, try to sponsor some small business. Even if you are not that well-to-do, raise awareness of the dying business on social media platforms, and raise funds for them. Something as small as buying from the small businesses instead of multinational companies is helpful. Even a small fund can help the small business owners in multiple ways and may even save their business.