The Impact Of COVID-19 On Small Business Outcomes And Expectations

Our research focused on the responses to the COVID-19 pandemic and lockdown. The main results were grouped into 3 categories as follows.

The impact of COVID-19 on business operations and employment at the start of the crisis.

The financial fragility of such businesses as seen from their cash on hand and ongoing expenses.

Expectations on how long the crisis will take and their economic survival to understand the impact of the pandemic on future policies.

The initial question was whether the business was still operational amid the pandemic. Most business owners, especially those of coffee shops and takeaway afternoon tea, revealed that their business was either operational, permanently closed or temporarily closed. Most of them revealed the reason for closing their business with the lead cause being COVID-19. Most businesses closed temporarily while others closed permanently due to the pandemic. A few were still operational but quite unsure of how the pandemic might affect them in the coming months.

Business owners were also asked to fill in a matrix showing the number of full-time and part-time employees on staff during the pandemic. The results showed that the number of full-time employees by at least 32{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2} by March 2020. On the other hand, part-time employees had reduced by at least 57{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2} compared to the number available at the start of the year.

Overall, employment rates had reduced significantly by at least 39{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2}. The number includes businesses that had closed temporarily. Businesses that were still operational during the pandemic had a reduction in the total number of full-time employees by 17.3{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2} while the number of part-time employees reduced by at least 34{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2}. Other surveys also revealed smaller effects of employment during the COVID-19 pandemic, about 10{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2}. Of course, this survey included larger firms rather than smaller businesses.

On the other hand, they also included newer firms with numerous employment changes. Other researchers revealed that paid employment at firms with less than 500 employees on staff experienced a 10{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2} decrease from January to April. The data is not conclusive since it counts employees who received their salary in April even if they were previously unemployed at the start of the pandemic.

Overall, there was a notable decrease in employment by at least 27{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2} for firms having less than 500 people on staff. Firms with less than 50 employees also experienced a decrease of 28{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2}. The data was available for the period between mid-February and April. These numbers are quite smaller than the 39{18427eb8f11860eefbdc4109120d3c8363567b9ab3bbd74f8dfe1bf9d20db9c2} showing from small businesses. To summarise, the survey showed the following effects.

A lot of businesses had to change due to the coronavirus pandemic to allow their employees to work from home. Due to social distancing and lockdown measures, most employees were forced to start offering their services from home, on a regular 9-5 day.

Small businesses had to come up with ways to remain in touch with all their employees even those working from home. Thanks to platforms such as Zoom, Skype, Slack and much more, employers could remain in touch with everyone without missing a beat.

Since most people were working from home, most companies opted for longer workdays besides the regular 9-5 days. Most companies didn’t have any issues with people working at any time of the day or night as long as they met their quota.

Due to the coronavirus pandemic, the business world has changed completely. Everyone was caught unawares by the huge event and most industries were affected negatively. As lives are going back to normal, there’s hope that companies will continue with the same ethic to allow their employees a little leeway when it comes to offering services.

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