Experts will be debating about what should have been done during the height of the coronavirus outbreak for years to come. Would it be better if businesses stayed open? Maybe they would’ve survived if they cut more jobs? How about if they borrowed money from the banks or demanded more from the government regarding the stimulus package and tax breaks? One thing is for certain, though. Businesses have to be more prepared in the future if they will mitigate the impact of any crisis on their organization.
Reduced Cash Flow
One of the biggest challenges of small businesses is the lack of a secure cash flow. How can they pay their workers? How can they buy supplies? They try to remain afloat during these extraordinary times, but social distancing measures and the rise of unemployment have greatly impacted their sales. That means that those who have not had a return on investment are scraping the bottom of the barrel in terms of their cash flow. Will this tide them over in the next months?
These businesses would be better off securing an SBA loan. The SBA guarantees the loan and matches your application with a partner institution that can lend you the money. While a small business loan is a great idea to expand your business, think long and hard before committing to anything that you have to pay with interest.
Disruption Caused by Social Distancing
Should you close your physical store because of social distancing? It doesn’t look like the government will lift this measure anytime soon. Even though some states rule that people can stand closer now, people are still wary about the risks to their health. In 2019, only 14.1% of small businesses operated on the internet. What will happen to the rest of the 85.9%? Will they transition to online stores, or should they weather the storm?
Travel and events businesses are the most impacted by social distancing measures. It has become necessary for schools and workplaces all over the world to stop face-to-face classes and physical retail because of the spread of the virus. A transition to an online store is just one solution.
A Decrease in Employee Productiveness
A survey showed that some 40% of the workforce either fell sick or need to care for ill family members during the height of the outbreak. But more than that, anyone who has tried to work from home now understands why this cannot be a viable long-term solution to the pandemic. Workers have become less productive now than they were during pre-pandemic. In their homes, they need to deal with personal tasks, as well as their professional duties. This doesn’t bode well for the organization these people work for.
Delays in the Supply Chain
Manufacturing supply chains suffer the most from the COVID-19 outbreak. They had to stop their production, which means their clients also have to adjust their production time. The impact of these delays is already being felt in as far as Europe and the United States. Although the manufacturing sector was also one of the first industries to be given the go-signal by their governments to restart production, the damage has already been done.
Businesses have to look at local suppliers if their global suppliers suffered. Local manufacturers also need this boost in their businesses. They need new clients to survive the pandemic and to keep most of their employees.
Rise in Unemployment
Economists predict that the world will experience one of its deepest recessions in modern history. This means more unemployment and economic instability. To tide things over, you need to work with your employees to work on a viable solution to keep them in your organization.
If you have already cut some employees loose during the height of the virus outbreak, this might not be the solution you are looking at right now. You can suggest to your employees to start looking for better opportunities. However, you can try to work out how to retain them by making them share shifts or transitioning to a commission-based compensation.
Though 2020 is soon over, this doesn’t mean the virus that plagued the world for most of the year will stop. Health experts are highlighting the long-lasting effect of the coronavirus on the body. Economists are doing the same. They’re pointing out the devastating impact of the coronavirus on industries and the workforce. The world needs a concentrated effort to battle through the worst of the impact and hopefully see the other side in a clearer light.