The entire world is on its toes waiting for the crisis of the ongoing pandemic to finally fade away so they can welcome their routine life and embrace it dearly this time. In the light of the events surrounding us right now, along with the routine lives of people that have taken a turn for the worse, many other avenues like trade, employment, investment sector, small and large-scale businesses, etc. have either doomed or are en route the trajectory of doom.
The business sector, especially, has suffered a massive hit. The business world that thrives on the aspects of constant exchange of information and communication between companies and their clients is witnessing the lack of the latter these days. According to a recent survey, about 46% of Indian businesses feel that the pandemic has impacted them very strongly and unfavourably. Logically speaking, if there aren’t any clients, the employers do not have a target audience to appeal to or appease. With the pandemic deteriorating day by day, there is an economic and financial recession in the business world rising slowly. Directly affected by the current state are small scale businesses. At this stage, the pandemic is causing direct financial loss to small scale businesses.
Small businesses are those whereby the entire process right from manufacturing to provision of goods or services is done on a small scale. These often require less capital and have a smaller workforce. Retail traders, for example, are amongst the small-scale businesspeople. Jewellery shops, restaurants, fast-food centres, clothing stores, salons and barber shops, etc. are all relatively smaller businesses that are visibly affected by COVID-19. In fact, the pandemic brought down the Indian restaurant business by 35%, with almost 100% of restaurants prohibiting in-dining options. In the face of this pandemic, if large multinational businesses with a global presence are striving for stability, one wonders about the state of these small-scale businesses that do not have a large budget or a wide revenue range in the first place. In the current situation, COVID-19 has managed to dampen the revenue growth by 2-4 percent in the consumer goods sector. How are these relatively smaller businesses, then, coping with the grave situation that seems to have easily consumed businesses all around the world?
1. Loss of sales due to lockdown:
The fear instilled by COVID-19 has had a direct impact on sales and the nature of consumerism. Due to the fear of contracting the virus, people have been extremely wary about consuming goods and availing of different types of services. Hence, various different types of businesses are suffering from the loss of sales.
Goods-based small-scale businesses like grocery stores, vendors, bakeries, clothing stores, general stores, hardware shops, bookshops, electronic stores, restaurants, cafés, etc. suffered a huge loss and were even forced to lay-off their staff. Apparel shops have not been able to conduct even 20% of the business that they used to before the lockdown was imposed. With no option but to sit idle in their homes given the stagnant nature of the outside world, it is but no wonder that these unfortunate workers and their respective enterprises have to withstand the test laid out by the pandemic. Owing to COVID-19, hotels across India saw a decline of 65% in their occupancy level in March 2020, and sales were down by 30-35%. Almost 15% of hotel employees stand the possibility of losing their jobs in the future as there will be no immediate surge in demand, and the National Restaurants Association of India (NRAI) presumes that 4 out of 10 or 30% restaurants in India could shut permanently.
Additionally, service-based small businesses like salons, beauty parlours, gyms, recreational spaces, etc. and other low scale workers like the carpenters, barbers, paddlers, hawkers, construction workers, maids, cooks, drivers, etc., are bearing the economic brunt of the pandemic too. The Maharashtra Nabhik Mahamandal (MNM), which is the overarching organisation managing the barbershops across the state, had to let go of its 60 lakh employees. With no choice of distributing their services virtually without the assistance of a mediator, they have been stripped off of their earnings.
2. Inconvenience caused due to closing up of interstate/international borders:
As a cautionary measure against the pandemic, the government, without delay, ordered that all interstate and international borders be regulated closely. Small businesses like travel and tourism companies, travel services, motor services, taxi-drivers, bus drivers, import-export services, start-ups with clients from other states and countries, etc faced a lot of inconvenience due to the closing of the roads and state borders. Because of COVID-19, the tourism sector sustained a potential job loss of around 38 million personnel. It is predicted that India’s inbound and outbound travel status will suffer an all-time low in the days to come.
3. Risk to lives:
The execution of the abrupt lockdown in the country has affected the earnings of daily wage labourers like street hawkers and vendors who are also, in a way, owners of businesses of extreme micro-scale. Presently, since the restrictions have relaxed and people cannot seem to keep themselves confined to their houses, these vendors have acquired a means to earn their livelihood again and are on the streets working. There are about 2.5 lakh hawkers in the city of Mumbai alone and all of them are working at the cost of risking their lives to a deadly virus.
How they’re coping?
1. Technology to the rescue
Post the guidelines issued by the government, several companies from different fields have found themselves recalibrating their modus operandi. With the absence of the option to work in a formal environment, these companies are left with no choice but to resort to the technological alternatives that are accessible to all.
Small businesses that have found themselves balancing on thin ice have the support of technology at their disposal. Through the digital platform of communication, at least some form of virtual connectivity is established. Virtual meetings, webcam conferences, etc. are the techniques used to assure work continuity in the corporate and creative sectors even today.
When it comes to business, the occurrence of daily transactions and monetary exchange is a given. Online banking services are really coming in handy during the lockdown. With the presence of online transactions of information as well as funds available, these businesses have mostly shifted their work to the virtual base. For example, the Maharashtra government is allowing restaurants to only run at 33% capacity which is why they have pivoted to delivery services to remain functional. Also, most goods-selling stores have shifted their workspace online and have either started their own delivery services or have partnered with prominent delivery services so that their businesses don’t completely halt. This is exactly what ventures like OkCredit help achieve. The objective is to digitally manage the work proceedings even with the lurking presence of a pandemic. OkCredit is a platform that is adept in assisting you with your money related issues. Be it instant payments, managing multiple transactions, etc. OkCredit acts as your own digital ledger where you can track and store crucial monetary information! Apps like OkCredit are the reason that a form of connectivity is always guaranteed between various services and their loyal customers. These trusted digital platforms ensure that the merchants and their clients always remain in touch. The added perk of digital platforms like OkCredit is that it does not hazard the risk of being in direct contact with the customers but provides the option of maintaining no physical contact communication and hassle-free payments.
2. Recovery strategies
A lot of small-scale companies have also been forced to let go of a portion of their workforce, while other companies have subjected their employees to major salary cuts. Quite a few of these companies have also been forced to scrap away provisions such as paid vacations, etc. According to an analysis conducted by Economictimes.com on employee conditions during COVID-19, 39% of employees are facing salary cuts while 15% stand to lose their jobs.
Various companies have also sacrificed on marketing funds and chosen to instead focus on their already existing customer base in order to survive. Thus allowing them to save money while earning enough to survive. This has also heavily affected a lot of small-scale start-ups working in the marketing sector. While small businesses have suffered enough, 53% of these businesses see the pandemic as an opportunity of ample availability of labor and about 64% of Indian businesses feel the current scenario will bring positive changes to their goods and/or services.
Be what it may, businesses that are coping with the ugly impact of the pandemic are journeying through keeping in mind the mantra of acceptance and adaptability. That they refuse to shut their doors even during such challenging yet sensitive times, is proof enough that come what may, the repercussions of it shall be dealt with. Even if it has managed to put quite a strain on the workforce, one can say that the vigour and spirit of these small-scale businesses continue to overpower and trump over the impact of a global scale pandemic. And just like a life insurance for ourselves, it would always be a good idea to have your business insured with a reliable business insurance for unforeseen times.