Boss Lady

How is COVID going to affect businesses?

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As the UK heads into a second lockdown, the US faces rising transmission, and European companies also head for more lockdowns, economic pundits are predicting a rough few years for the nation’s economy. Unemployment has already risen by one percent since 2019, millions of workers are on government funded job retention schemes, and the hiring rate has dropped by over 40%. In fact, according to the IMF the British economy alone will slump by 3% this year, making this the start of the greatest depression since the 1930’s.

For small business owners, enormous resilience, agility and patience will be required to weather the storms yet to come. Research by Goldman Sachs shows:

  • ⅔ of British businesses are showing decreased revenue
  • 44% of British businesses have had to cut jobs
  • 75% accessed the furlough scheme
  • 80% say they will need further support to avoid more redundancies

While all this would be challenging enough, the great unknown in all of this is when things might start to return to normal. The pandemic’s course next year will depend greatly on the viability of vaccine, and on how long the human immune system stays protective after vaccination or recovery from infection.

Until then, small business owners will need to use every weapon in their arsenal to keep afloat, because at some point the government will have to stop issuing economic support.

Agility is the key to survival

When historians look back to these years, they will likely see COVID as a hastening process on what was already occurring: a cultural shift in the way humans do business.

For many businesses who didn’t yet have a website, this has been the time they’ve made that happen. Others have shifted or expanded their offerings in line with consumer demand.

Training providers have adopted digital meeting rooms such as Zoom, gin distilleries are making hand sanitiser, local pubs are offering home deliveries.

The key here is to figure out what skills you have which are marketable despite the governmental restrictions on COVID-19. DO you need to invest in technology or training to make this happen?

Luck will play a part in who survives

Of course, not every business has the ability to reinvent themselves for the digital age. High street retail, for example, already struggling for many years, will have a difficult time competing with online giants such as Amazon, if their offerings are the same.

Sectors such as travel, dependent on the free movement of people across borders, will also have a difficult time maintaining cash flow when their core business has all but ceased overnight.

“We are already seeing an uptake in businesses who took bounce back loans in good faith but are finding they are unable to repay them,’ commented Tony Smith of insolvency practitioners Company Debt. “With many sectors already struggling due to Brexit, COVID-19 has added a level of pressure which many small businesses simply cannot weather.”

About Tony Smith

tonys@thebusinesswomanmedia.com'

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