As small businesses enter a post-pandemic recovery phase, here’s what could help them
Small businesses have finally entered a stage of post-pandemic recovery, but they’re still facing significant challenges. The data we have so far can provide us with a clearer view of the process and give hints on what can be done to support these efforts.
The coronavirus pandemic has left its mark on the global economy, affecting businesses of all sizes and in every industry. But it can’t be denied that smaller companies and startups have been one of the hardest-hit sectors, not only because of the economic instability created by the outbreak, but also because they were subjected to most restrictions, and had to cope with a longer lockdown period in general.
Many of these firms had to rely on government support schemes in order to survive or adapt their activities and operations to the new state of affairs. And even with the sustenance they received, which in most cases proved insufficient, and the measures they took to mitigate the impact of the pandemic, a large number of companies had no other choice but to close up shop.
Now, with the pandemic subsiding and many of the restrictions being lifted, businesses all across the world have entered a post-covid recovery phase. But this means that the assistance they’ve been receiving for the past two years is also coming to an end. So, what does the future have in store for the business sector in general and small companies in particular? Although it’s still too soon to make accurate predictions, we do have an overall idea of how companies are coping at the moment, the challenges they’re facing and the strategies that can help them during this difficult period.
What makes small businesses more vulnerable than the rest?
In general, small businesses are the ones that face greater risks during a crisis, due to their limited resources and their inability to withstand long periods of economic recession. But they’re also the ones that can adapt with greater ease when faced with sudden changes. So, why were they so much more vulnerable than larger players during the covid pandemic?
The coronavirus pandemic posed very specific challenges for small businesses. For starters, they represent the majority in the sectors that have seen the toughest restrictions during lockdowns, such as hospitality, travel, and personal services. We’re talking about restaurants, salons, hotels, and other businesses in the service industry.
Apart from that, many small businesses and startups engage in high-risk activities, which limits their chances of being approved for a loan, or finding investors who are willing to support them. Startups are also in the early stages of building a relationship with their customers and partners, and more often than not, they don’t have enough time to build a cash reserve to rely on in the event of a major crisis like the one we’ve just experienced.
All these factors made it a lot more difficult for small companies to push through the pandemic and make up for the shortages they had to deal with.
What we know so far
It hasn’t been easy for small firms to make it, but those who did are finally starting to see the light at the end of the tunnel. This belief is also supported by Facebook’s latest survey conducted in the months of July and August of 2021, on over 35,000 small business leaders across 30 countries and territories. The results of the report reveal some interesting facts about how small companies have been coping with the impact of the pandemic and the challenges they are dealing with now that the picture is becoming less bleak.
According to the survey’s findings, the rate of small business closures has decreased globally, from 24% down to 18%. Employment rates, on the other hand, are on a downward trend for businesses operating globally. What’s more, women and minority-owned businesses are at a higher risk of being closed or experiencing low sales compared to the global average.
Unfortunately, regardless of management, industry, or niche, most small firms are still having financial difficulties and struggle to stay afloat. Almost 60% of them are having trouble covering their expenses, and a quarter is having problems paying debts, loans, and employee wages.
There’s some good news though. Amid the chaos and turmoil, some businesses have found salvation by going digital. The use of digital tools and platforms has gone up to 88% during the pandemic. As digital marketing experts at Passion Digital explain, designing websites that are user-friendly and perform well is a must these days. Thus, the companies that invested in building a strong online presence had greater chances of survival than the rest. Chances are the shift to online and the widespread use of digital tools is going to be permanent.
What could help
As things progress, we’re learning more about the challenges faced by small businesses as they’re trying to recover, but the question remains – what can be done to speed up the process and create a sense of stability?
Experts believe that the solution might come from getting early advice and support on how to handle the financial pressure from creditors and institutions looking to get their money back. If these entities have taken a step back during the pandemic, the ease of coronavirus restrictions means they will soon resume their normal operations and demand small firms to make payments on time.
Therefore, the best course of action for small business owners is to seek professional advice as soon as possible. Business recovery professionals have a range of tools at their disposal to help firms avoid insolvency, or buy them time to find an adequate solution for the issues they’re dealing with.
Also, the large-scale adoption of digital solutions can help small businesses get back on track faster by addressing their current needs. Companies looking to enhance their online presence can consult an SEO agency in London, to make sure they are focusing their efforts in the right direction.
There are tough times ahead for small business owners, but there’s also hope. With proper planning, flexibility and adequate support small businesses can thrive again in a post-pandemic world.