Most small and moderately-sized businesses and enterprises (sometimes called SME) are known for holding much of the economy in place. While large companies and corporations are known for making fast recoveries and changes during the early onset of the pandemic, small and most medium-sized businesses are still struggling and are taking the brunt from the economic damage caused by an economic crisis.
With several administrative factors coming into play such as transport delays, restrictions between local borders, social distancing, and lockdowns being implemented, this has effectively disrupted much of the supply chain, shrank the amount of cash flow, and dampened demand from consumers while restricting the amount of foot traffic in the area. As a result of these safety measures, small and moderate businesses won’t meet their monthly quota in terms of rent, wages, inventory, and milestones.
Even though some industries are still doing well for themselves, especially those that have been migrating towards a more digital model, most businesses have been collectively taking a blow.
But even though most SMEs are struggling in bouncing back, governments have been emploring aid in the form of policies that will jumpstart local economies. These policies are known for promoting the free-flow of goods and services through different areas, which can eventually help the supply chain in different regions around the world.
But how does an SME bounce back to their former glory? What business strategies can be incorporated into ensuring that the business will be on solid ground, even during uncertain times? Here’s what you’ll need to know.
Challenges to Consider
But before we discuss the recovery measures that we have to put in place, we must discern the challenges during this economic and health crisis.
It’s not just a financial and economic crisis for many small businesses since the pandemic will reverberate throughout different aspects of society and throughout different industries. How fast a certain small-scale business can open up will depend on factors such as the spread of COVID-19 and the policies in place that are designed to jumpstart much of the local economy.
Here are some key challenges:
- The lack of cash flow, especially when foot traffic is restricted to specific regions.
- Drop in demand for services and products in certain industries
- Business closure
- With the lack of cash flow, it is harder to find potential investors.
- Changing business strategies and models will take a while. Finding alternative products, platforms, and services will also cost resources.
These issues must be addressed by small businesses and government authorities to help both workers and employers survive during an economic crisis. But what are some effective measures that can help with these challenges?
There are various measures in place that can minimize and “soften” the blow that most enterprises face during the economic crisis. Most authorities are focused on general rules and regulations catered towards employees and the general cash flow of businesses.
In several countries, instruments are being deployed to support small businesses and sole contractors or business owners during tumultuous times. Short-term liquidity is known for being the most pressing matter at the moment. Here are some recovery measures being put in place:
- Loans — If you’re looking for a monetary boost in the midst of the pandemic, one of the best ways of bouncing back from having a shortage of capital and inventory is by taking in an SME loan. Loans are a great way of giving your business the much-needed momentum that it needs to jumpstart itself. Funds that can be used for inventory, equipment, and marketing can help increase cash flow and engagement. Still, the process of applying for a loan can be tricky, and you might want to first consult with a professional before making any final decision. Fortunately, there are foreclosure attorneys that can help you make the best move regarding your loan.
- Switching to a More Digital Audience — Most small businesses, especially those in the retail and food industry, have been switching towards a digitalized model. Adapting to the ever-changing business environment by shifting to another business model, changing products, platforms, and services is necessary. Not only will this ensure the continuity of your business, but it will also help you reach out to a wider audience.
- Income support — The government will be covering a portion of the monthly expenses and costs of employees, especially those that are forced to stop.
There is a multitude of ways for a small business to bounce back during an economic crisis. Although it might seem like some hurdles and a series of crises you will need to expect, making necessary changes while also asking for help from agencies and authorities can help ensure that you’re cushioning the blow that the pandemic has on your business.