Business owners have to navigate various issues related to the pandemic while trying to stay afloat, online meetings and teleworking being invaluable tools in doing so. Unfortunately, however, some firms are still finding themselves struggling to remain viable.
To overcome these challenges, business owners need to focus on strategies like cutting expenses, developing long-term projects and maintaining customer contact. But these should all be priorities anyway.
1. The Financial Impact
Pandemics occur when an outbreak spreads rapidly to an immense number of people across multiple nations or continents. This may be caused by factors like an increasingly powerful virus finding new ways of spreading from person to person.
US Census Bureau 2020) showed an increase in business application rates during the pandemic due to nonstore retail and personal services businesses – suggesting they might be more resilient and better capable of adapting to ever-evolving conditions.
But this increase in entrepreneurialism should not be dismissed as solely a side-effect of pandemic; many new business owners likely take advantage of low interest rates, fewer job prospects among laid-off workforce and rapid developments in ecommerce to start new ventures.
2. The Shift to Remote Work
Global pandemic has altered where work takes place; now most individuals could work from home three to five days each week as effectively as in an office if given access to technology and infrastructure.
Yet some jobs, like conducting CT scans or making deliveries, require physical presence and can’t be completed remotely. Women and minorities tend to hold lower-paying jobs that don’t offer that option.
So while remote work may help spread prosperity outside large cities, it may also exacerbate inequality on a social level. Previous MGI research has shown that women tend to disproportionately hold jobs with limited potential for remote working.
3. The Impact on Employees
Workers are a vital resource during a pandemic. They provide essential advice and logistical assistance; even leading customer-centric innovation projects. However, how is it impacting them and their ability to use this power?
At the core of any successful business is its ability to adapt in times of pandemics. Be it by cutting employees down or switching to remote work arrangements, businesses must remain flexible enough in order to survive COVID-19 disruptions and keep operating.
One key variable affecting firms’ capabilities to adapt is their status as either “key” or non-key firms, determined by location and 2-digit North American Industry Classification System sector. By using gender of managers or owners and establishment count as dummy variables, we find that key firms experienced less sales decline than non-key firms (Figure 2). This may be partially attributable to consumers reducing consumption on goods and services not considered necessary during an influenza pandemic.
4. The Impact on Customers
Maintaining your business during a pandemic can be challenging. Lockdowns, capacity restrictions and people staying home make it more challenging to draw customers in while simultaneously keeping existing ones happy. But there are ways of remaining profitable such as online meetings or teleworking that may help.
However, many small businesses remain uncertain as to how long these changes will persist and what effect they will have on customer relations. Those that managed to survive the pandemic are using innovations they implemented during its severity in order to prepare for economic recovery when it returns.
Additionally, the COVID-19 pandemic has altered how consumers purchase goods and services. Today’s consumers are becoming more digitally adept and brand conscious than ever before – research indicates this change. Therefore, entrepreneurs need to remain abreast of these trends to effectively engage their target audiences in an ever-evolving digital sphere.
5. The Impact on Governments
Though lockdown and physical distancing measures forced many businesses to close down, governments allowed certain services they considered essential to the public to remain open – these ranged from food producers and toilet paper producers to gas stations.
Unsurprisingly, key and non-key firms experienced similar declines in sales during the pandemic despite differences in size; however, their outcomes differed depending on whether they were considered key or non-key firms (see panel a of figure 1).
This could be because governments tailored their support mechanisms differently for key and non-key firms, with key firms receiving cash transfers and wage subsidies more frequently, while non-key firms were offered payment deferrals and improved access to credit. Unfortunately, it can be hard to ascertain exactly how each policy affected both groups.