The Economic Impact Of COVID On Small Businesses
Coronavirus is impacting everything, and by everything we mean every single aspect of life imaginable. Work, health, hobbies, relationships, travel, social life, sports – you name it, the scourge of COVID-19 is embedded in our lives now and everyone has felt the effect in some way.
What is becoming increasingly apparent is the uncertain future of almost every type of business across the economy – from the self-employed to multinational behemoths.
Unemployment is at an all-time high. In the UK, nearly 8 million workers have been furloughed under the government’s worker retention option. The work-life balance of entrepreneurs has flipped on it’s head and the once attractive prospect of owning their own business is no longer a reality for many people.
In order to gain an understanding of the extent to which our clients have been affected, we ran a comprehensive COVID-19 survey last month focusing on how small businesses are coping with the pandemic economically.
If you’d like to use the data from this survey or any of the information in this article please get in touch – we believe collaboration and cooperation can see us through.
Our coronavirus survey
The survey focused on finding out how small business owners in the Zervant community have been financially impacted by COVID-19 and the government measures put in place to tackle the spread of the virus.
It seems obvious that the survey outcome would be overwhelmingly negative so why spend time confirming what we already suspect? Well, this is a situation unlike anything we have ever experienced before.
There is no precedent here, no experts with concrete answers and certainly no obvious quick fix. We need to learn lessons and quickly.
We believe a qualitative strategy for improving our knowledge would be to gather and analyse the experiences and opinions of the people directly affected – from this we hope to forecast with some degree of accuracy the future state of the small business economy and come to understand the general anxieties and frustrations of the individuals affected.
“Generally speaking, how does the Corona virus or the measures taken to mitigate the spread of the virus affect your business?”
Unsurprisingly, only 6.5% of the respondents believe the at the global situation has had a positive impact on their business. 10.5% believed the virus would have no effect on their company, 13% remained unsure how things would play out.
What did not come as a shock is the 70% of respondents that felt this has had a negative effect on their business.
Work has dried up
We asked participants to estimate the percentage of work they’ve had to postpone and the percentage of work they’ve had to cancel due to the the governmental measures put in place to curb the short-term spread of the virus.
Adapt & overcome – words from our community
Here we’ve taken a small selection of the notes left by respondents. We asked if they had plans to try a new approach or change business strategies and also, in general, to share with us any thoughts or advice on the situation.
It seems that while some are trying to diversify in order to survive in the short-term, others are using the break to focus on other issues.
One Finnish respondent believes that while the flow of work is less than optimal, we must look after our own well-being:
Maintain your everyday routines as well as possible. Now is the time to care about the things that otherwise could not have been done and maintain a certain daily rhythm.
However, many also offered a note of caution as businesses look to their respective governments for help.
A business owner in Sweden says:
Don’t be fooled by the government’s money. It needs to be paid back with a high interest rate. If the goal is to offer relief, then it needs to be free of charge
Another piece of advice, this time from Germany, suggests taking help from anywhere you can find it.
Fill in applications for federal and state grants. Check with the employment agency to find a new job to secure liquidity and also ask your friends and family if they know of any work opportunities
Some words of wisdom coming from Finland were:
Entrepreneurs should not be paralysed and follow the flock. Keep a cool head and be realistic
One notion that has been continually bandied about throughout this crisis is that companies are operating without any back-up funds and we are facing a complete collapse. We have seen this with massive companies like Virgin Airlines asking for vast government handouts just to keep afloat.
While the number of companies facing imminent bankruptcy is concerning, it is also pleasing to see the percentage of entrepreneurs who feel confident in the short-term. 11% of business owners believed they could continue operations for more than a year under the current conditions.
Set up a home office & stay safe
So, what is next? While the survey provided some figures and a little insight into the effects of coronavirus, one thing that shone through was the human aspect of business.
Entrepreneurs clearly care about their employees and each other, with a real sense of togetherness coming though. For example, one respondent in France says:
We set up teleworking as much as possible by taking a computer station and documents at home. We must take care of our employees, by informing them of the right actions to take when they go out and when they are at home. Having video conferences and calling your employees every day to find out how they are doing also helps
Another German business owner offered words of encouragement to his peers, saying:
Stay strong and stick to the guidelines. Together, we can do it!
A compatriot also had a positive slant on things. He intends to:
make the best of the situation and try to develop new ideas
Survey respondents & further reading
A total of 278 respondents from across Europe took the time to answer our questions and we are grateful to every single one of them. Business owners from Germany, Finland, France, Sweden and the UK got involved, which gives us an excellent overview of the continent.
Over the course of the next few weeks and months, we will be collating more of the results from this and other surveys. This will allow us to gain a deeper knowledge of how companies are dealing with the coronavirus situation, as well as what they intend to do going forward and what mistakes can be avoided in the future.
If you have any concerns about your business that we can help you with, please do not hesitate to get in touch with us here at Zervant. We are always available and will do what we can to support you in surviving this global menace.