How the COVID-19 is Destroying Small Businesses.
How the COVID-19 is Destroying Small Businesses.
Imagine you are fired from your job. That means your source of livelihood has come to an end. Imagine you don’t have demand from the market anymore. That means you will record no sales either personally or as a business.
But when two elephants fight, it is the grass that suffers much pain. That is true for the small businesses. As we know that small businesses are the backbone of most economies.
It is small businesses that grow into unicorn and from unicorn into publicly traded companies. How will these small businesses grow at this time? Think about this for a while.
The Impacts of COVID-19 on Small Businesses.
The pain started in a small way, it has grown to become a very big pain to small businesses.
The COVID-19 can be contracted through respiratory droplets. This has led to closure of businesses and other physical gathering centers. Here are some of the impacts to small businesses;
- Close Down of Businesses.
In some countries where the pandemic had spread widely, businesses have been closed down. Workers are no longer allowed to come to work instead they work remotely. The goal is to prevent physical contact between people. What this means is a decline in the revenue of the business due to cancellation of orders. A decline in productivity in such businesses.
- Lack of Credit Facilities
The blood of small businesses is finance. When there is no finance for the business to keep up operations, that will be the death of the business. This moment when business activities are reduced, that means no bank will like to give credit facilities to businesses. This is such a grave problem!
- Fixed Cost Remain Fixed.
At this moment when all business variables need to decline, some are still fixed. Business cost items like rent, salaries, insurance etc will still remain fixed. The question is this; how will the business owners pay these bills? A time when there is no cash flow. A time when there is no revenue.
What can we do at this critical point in the history of the world? The destiny of humanity rests on the shoulders of world leaders, you and I included. Here are the solutions that great people and organizations are already providing;
What World Leaders Should do to Help Small Businesses.
In my article on the global worth of Coronavirus, I made a call to entrepreneurs, philanthropists, donors agencies and organizations that we could together deal with this pandemic.
Here are some of the solutions so far;
- The Facebook Solution:
Facebook has taken a lead in initiating measures that will help small businesses tackle the challenges they are facing at this critical stage.
Few days ago Sheryl Sandberg posted on her page on Facebook that Facebook has come up with an initiative to help small businesses. The initiative is to provide a grant of $100m in cash and advert to support small businesses. This will go a long way in solving the financial problems of the small businesses at the moment.
- The Jack Ma Solution.
Jack Ma has also come up with a great initiative in order to contain the spread of this pandemic in African countries. Jack Ma is donating masks,test kits and protective suits to all countries in Africa to help the continent in its fight against the COVID-19.
This approach is helping to curb the spread of the viruses in developing countries. This will impact small business operations too as the spread of the virus is still small compared to other countries.
- The Progress Ibrahim Solution.
In periods of crises what we need is solutions and not complaints. So, in my own capacity I have decided to use the power of copy writing to influence great leaders, donor organizations, philanthropists and entrepreneurs to rise and support in whatever way so we could collectively tackle this pandemic.
This approach could lead to donations of materials, provision of grants to support businesses and other help.
- Suggested Government Solution.
I must commend the government of many nations that are already being proactive about the containment of this pandemic. This is what I suggest every government should do through its Reserve Banks or Central Banks. Government should earmark special funds to support small businesses in their countries. This will help such businesses to stay alive at this period.
We know how important these businesses are to unemployment reduction in every economy. If your government knows, then come up with this bailout measure to help them stay alive.
On an individual level what are you doing to help in the containment of COVID-19? Firstly, ensure you adhere to precautionary measures like hand washing with sanitizers, social distancing etc. Contribute whatever you can do to support humanity in time like this.
What is on your mind? Comment below;
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