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The Pandemic’s Impact on Small Businesses

Very few countries in the world can claim to have experienced minimal impact from the pandemic that is still plaguing many nations today.

The UK is among the majority: England enforced its third national lockdown in January as the daily confirmed cases spiked to 60,916 on January 5. Objections to the lockdown were largely quelled when reports of the day’s tally came later in the evening revealing a second new high of 62,322 new cases in one day. The data also showed the highest daily death toll since April 2020.

News of surges in coronavirus cases have become extremely relevant to businesses ever since the pandemic started because they inevitably affect operations, regardless of the size of the enterprise. Small businesses, however, experienced the brunt of the pandemic’s detrimental economic impact:

  1. Sixty-one percent of small and medium enterprises (SMEs) experienced a massive decrease in trading activities after the first lockdown in 2020.

  2. In October 2020, 53.2 percent of entrepreneurs feared their businesses would run out of funds within the next 12 months if the pandemic situation doesn’t alleviate.

  3. SMEs that didn’t have enough business activity to prove they’ve had at least a two-year tenure were disqualified from the Coronavirus Job Retention scheme. They could not, therefore, get the financial support they needed to stay open.

  4. Forty-four percent of SMEs had to lay off employees.

Many small businesses also struggled to keep up and adapt to the rapidly changing times. The present situation calls for digital integration in various areas of business, primarily for marketing and PR, customer services, and points of sale. Businesses that could sell their products and services online and provide a digital infrastructure where customers can shop, transact, and engage with their brand have a better chance at surviving the pandemic.

SMEs’ Struggle with Pandemic-Fueled Digital Transformation

“Digitisation is necessary for survival,” is easier said than done for many SMEs. Forty-three percent of SMEs that went digital during the pandemic said they incurred higher costs on additional IT equipment, software and SaaS products, and new staff. For some, these costs may already be beyond what they can spend in this already challenging period of low sales and unchanging overhead expenses.

Apart from the issue of money, many small businesses also face additional obstacles:

  1. Lacking sufficient digital skills and knowledge about digital solutions.

  2. Having existing equipment that is incompatible with the digital solutions they plan to adopt.

  3. Not having enough broadband capacity to support an online business operation.

  4. Having a high rate of cyber risk.

Undergoing digital transformation is one hurdle that SMEs would need to overcome because experts predict that the digital trend will continue well after the pandemic ends.

The Future for SMEs

The future is uncertain, but one thing is for sure: a lot rides on the health of SMEs in the country. Fifty-two percent of the $2.2 trillion income of the private sector is contributed by small and medium enterprises. More importantly, SMEs are responsible for the existing 16.6 million jobs (or 60 percent of all jobs in the private sector) in the UK. If the small business sector suffers and declines, millions of jobs and livelihoods could be at risk.

Fortunately, there are reasons to be optimistic. Vaccines are already being rolled out all over the country, and while they cannot completely eradicate coronavirus, they are our best hope at beating the pandemic. Of course, preventive measures must continue for people’s protection. As lockdown restrictions will reportedly be lifted soon, non-essential shops will be allowed to reopen. SMEs will play a big role in preventing a third surge in COVID-19 infections and an inevitable lockdown.

Our Commitment to Our Clients

MS Webb takes the responsibility of ensuring our employees’ and clients’ safety within our business premises. Even as we continue to provide enforcement, security and bailiff services, we maintain a strict policy of requiring face masks and frequent hand-washing to all on-site employees. Our office-based staff, meanwhile, are all working from home and following social distancing protocols until further notice.

As we look forward to a pandemic-free future, MS Webb joins SMEs in keeping the virus at bay and helping revive the economy.

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