Question

There are many difficulties faced around the world due to pandemic, it affect more to small enterprises than large one.

Answer 1

While businesses in general, and entrepreneurs in particular, have shown strong levels of company resilience, economic shocks resulting from the lockdowns have disproportionately impacted SMEs, and the effects have been varied across sectors. Labor shortages, human mobility limitations, self-isolation, major reductions in capacity utilisation, and supply chain disruptions have all harmed SMEs. On the demand side, the termination of payment wages, as well as decreasing demand for consumption and investment, have disrupted circular income flows. A slew of negative factors, including deteriorating expectations, fear of contagion, increased uncertainty, lower earnings, reduced consumption, and a decline in banking credit, have sparked wild swings in the financial markets.

During a recession, economic effects are not evenly distributed throughout productive sectors or enterprises; SMEs are more affected than large firms, and sectors like tourism and transportation are more susceptible to social distance or confinement. Only a paradigm that explicitly incorporates each sector's exposure to multidimensional shocks and their interindustry interconnections can model this variability in company sensitivity.

Many people will believe that firing employees is the best solution. This has the potential to turn a financial crisis into a social disaster. Fortunately, for the time being, most organisations are concentrating their efforts on protecting personnel, recognising business risks, and managing supply chain disruptions. This will be critical for conserving employment and incomes, maintaining financial stability, and reviving growth by limiting trade and global supply chain disruptions.

The most severe impacts can be avoided if these businesses recover quickly. But, beyond the immediate recovery, we must assure small enterprises' medium- to long-term survival by reducing barriers to their expansion.

The main difficulties will be to increase small businesses' access to capital and investment, offer them more freedom to develop into new industries, and encourage them to embrace new technology to better connect with producers, suppliers, and consumers.

The initial obstacle is the most significant. Due to a lack of market information, risk concerns, and poor quality loan applications, banks are generally hesitant to lend. Opportunities will be squandered and growth potential squandered unless investors, entrepreneurs, and viable firms can be funded.

Business rules and regulations can be updated to meet the demands of modern business. In many nations, starting a firm comes at a significant cost and takes a lengthy time, jeopardising investment and growth. This is a major factor for some countries' substantial informal labour marketplaces. When COVID-19 restrictions are removed, efforts must be made to reduce bureaucratic red tape so that enterprises can start and operate as rapidly as possible.

The second phase is to reconsider the role of state-owned enterprises in order to free up more space for small businesses to expand. State-owned firms offer critical services such as power generation, water, sewerage, and telecommunications in many nations. However, they have the potential to be inefficient, drain government resources, and produce minimal returns. There are a lot of monopolies. Governments may be able to use the epidemic to allow micro, small, and medium-sized businesses to offer some of these important services.

Competition and consumer protection frameworks can be enhanced in combination, particularly in markets where governments play a large role and a few enterprises dominate crucial sectors. This limits consumer choice, keeps prices high, and puts small enterprises under pressure. Better consumer safeguards would limit the potential for price limits and price gouging, both of which distort markets and have a significant impact on consumers.

Giving women the means to realise their potential as company owners is also a focus, expanding opportunities to contribute to community welfare and economic prosperity. Training in business processes, access to capital, and addressing traditional behaviours that favour males over women can all help to support female-led firms. In Armenia, for example, such programmes resulted in more women registering businesses, improving their skills, and gaining greater access to finance, while financial institutions were advised to hire more female loan officers.

Finally, small enterprises can be assisted in leveraging new technologies to revamp their business models.

Health care is a potentially promising sector, which is currently a global priority as the globe fights COVID-19. Rather than having to go to a big city to visit a specialist, tele-health platforms offer virtual diagnostic, treatment, preventive, and curative services, as well as health-care professional training in areas like epidemiology and pandemic influenza risk communication. These services are becoming increasingly important, and they appear to be designed specifically for micro, small, and medium-sized businesses with appropriate skill and capital.

Support for agriculture-related developments will help these enterprises flourish even more. Small-scale farmers are already employing cutting-edge technology and methods to boost yields, improve input management, introduce new crops and production systems, and improve product quality. Such techniques, with well-targeted support, can be critical to a company's survival amid the current crisis.

Governments can, for example, invest in satellite-based earth observation technologies to provide smallholder farmers with real-time information on land and water resources. Smallholder farmers can use satellite data on water levels and weather forecasts to reduce water stress and consumption while increasing yields by 200 percent to 250 percent. Customizing these tactics to the needs of individual countries could save millions of lives and strengthen economies against future shocks.

In addition to the problems that small businesses already have, the coronavirus epidemic has created a slew of additional hurdles for enterprises to deal with. This era of uncertainty has compounded existing challenges such as money management at a period of lower demand, work-life balance, and customer base. These challenges, as you may have noted, tend to overlap. Businesses must understand and identify these difficulties as soon as possible in order to strategize and reevaluate other choices.

The SBA has offered small business loans to enterprises around the country through the Paycheck Protection Plan, economic disaster loans, and other aid programmes under the federal government, but those monies will need to be refilled as we progress and states reopen. It's critical to keep an eye on these impending events as Congress works to put together a fresh pandemic relief package.

Finally, establishing a work-life balance and engaging in mental health activities are critical to the company's and individual's health and future success. As some people have children, family members, and other responsibilities, personal and corporate obligations collide. It's critical to remember to be mindful of exhaustion and deteriorating mental health. This pandemic has raised a lot of concerns about uncertainty and the future, which has caused a lot of anxiety. Before facing burnout, it is critical to take the time to examine and adjust one's life.