Problems Faced by Small Businesses During Covid-19

  • May 13, 2021
  • 6 min Reads
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The COVID-19 pandemic has transformed the lives of almost all people around the world to some extent. It has negatively affected the personal life (wearing masks, washing hands, or sanitizing everything), social life (maintaining social distancing and avoiding public places or gatherings), and professional life of people around the world.

This pandemic has affected many businesses with new rules and regulations. Employees and employers have had to adjust to the new rules which have affected their overall performance and productivity. For example,

  • Some businesses faced monetary loss due to being forced to close operations during lockdown.
  • Some businesses permitted to remain open, however, faced different types of challenges.
  • Not being prepared for home-based operation due to lack of necessary IT equipment, poor IT infrastructure, poor/saturated internet connections etc.
  • Staff being unable to get to work due to lack of transportation.
  • Staff being unable to work effectively  from home due to lack of appropriate work environment or other challenges.

Businesses face different types of challenges during the COVID-19 pandemic, and small-to-medium businesses have suffered the most. However, the following tips may help you overcome your challenges and run the business as smoothly as possible amidst the pandemic.

Here are 5 characteristics to consider

  1. Managing Money
  2. Decreased Revenue
  3. Going Digital
  4. Concerns about the Second Wave
  5. Work from Home and Personal Life Balance

1. Managing Money

Money management has become more difficult for medium-to-small businesses due to the COVID-19 pandemic, loss of customers, and reduced sales. Hence, these businesses have had to balance the budget in different ways, such as

  • Reducing the cost of operations
  • Using different methods to earn revenue
  • Reducing number of employees through layoffs or by changing the hours of operations

These changes have negatively affected business operations. To help businesses, the Small Business Administration (SBA) started the Paycheck Program Act. It was established by the CARES Act.

It has been designed to provide struggling businesses with loans enabling the business owners to maintain the payroll and to keep up with the major operational expenses.

2. Decreased Revenue

Many businesses have noticed a reduction in revenue due to the COVID-19 pandemic. The reason behind this drop varies from one business to another. However, it is mostly related to customers’ behavior or Government rules regarding social distancing to prevent the spread of disease. A survey was published in May 2020 in regards to the drop in revenue. It indicated –

  • 62% of small businesses noticed a decrease in revenue
  • 12% reported increase in revenue
  • Total revenue loss was up to 10%-30% in 47% of  businesses
  • 41%  of businesses reported that revenue loss surpassed 30%
  • 13% of businesses noticed complete revenue loss

The following tips may be beneficial if you noticed a dip in revenue:

  • Try to diversify the revenue streams
  • Develop a practical strategy to satisfy customers’ needs
  • Ask customers how your business can use what it offers to help in this critical time
  • Explore the possibility of online business transactions

3. Going Digital

Many businesses have lost their customers to businesses operating through eCommerce channels or businesses offering online shopping. You can beat this challenge by going digital.

  • Use social-media apps, customer subscriptions, or newsletters to inform customers regarding updated methods of business operation, quality of your products, or other important information.
  • Use e-commerce websites to advertise products
  • Use social media to extend the customer base or to develop a new customer base

You need to have an effective and practical online marketing strategy to build an online brand and develop a new base for the customers to interact with your business.

4. Concerns about the Second Wave

According to a survey that was conducted in July 2020, around 65% of the owners of small businesses are worried about lockdown or staying non-operational when or if the second wave of COVID-19 pandemic hits. Many entrepreneurs have started to safeguard their businesses from the possible damage that may result from the second wave of COVID-19.

The aforementioned survey even revealed that 32% of the owners of small businesses purchased additional products and supplies in fear of the second wave and a quarter of the participants took necessary measures to improve their digital payment options or eCommerce store.

5. Work from Home and Personal Life Balance

Establishing a work-life balance has become difficult for many people, as they need to take care of the children (schools and daycare centers are closed), elders, and work (majority of the offices prefer working from home) at the same time. Thus, it has become essential to balance the professional and personal life for those who are working from home.

However, it is easier said than done.  Employee performance has been affected negatively by the pandemic. The overall productivity of the businesses has dipped due to this reason. This is a challenging situation for both employees and employers which has led to frustration, anger, depression, and other negative feelings.

How to Overcome Them?

1. Have a Crisis Team

You have to establish a crisis team if you want to ensure business continuity. It enables you to act as quickly as possible to mitigate the negative impacts of this pandemic and to prepare the business for future developments. 

When building a crisis team, you have to judiciously select the personnel. This team will be responsible for coordinating response efforts, reviewing business continuity plans or crises, and preparing for unknown variables surrounding this pandemic. This team will ensure stability across all functions and departments.

2. Stay Connected to Your Customer

It is important to stay in touch with the customers during this pandemic. However, you have to use this connection to strengthen the buyer-seller relationship instead of trying to increase sales. 

You may publish educational content, webinars, or tutorials to support your customers, or to promote the brand personality. It enables you to increase a brand’s visibility.

3. Split the Team Arrangements

You need your personnel to be healthy if you want to keep running your business or commercial establishment. Hence, it is prudent to split the entire workforce in multiple teams. Thus, there is less possibility for the virus to spread to the members of other teams if one or two members of one team are infected. You can keep running the facility with the members of another team, while the sick member/s remains under quarantine.

You may select separate work locations for different teams. You may arrange for the teams to work separate shifts. It reduces the possibility of spreading disease amongst the members of different teams.

4. Flexible Work Arrangements

You may use flexible work arrangements to prevent employees from coming in contact with one another. For example, some of your employees may work from home. You may even split the employees in multiple groups or let them work different shifts if they cannot work from home if this is not a viable option for your business.

It enables you to prevent gathering. You may support your employees by compressing their work schedules or by reducing their work hours, allowing them to handle additional duties in their personal lives.

Additional Read

Coping With Mental Health During Covid-19


The COVID-19 pandemic has thrown several unique challenges at businesses. Some challenges may overlap with one another. You thus need to recognize them and act to minimize damage. 

You need to develop practical business strategies based on the altered scenario and re-evaluate other options if you want to successfully run a business. Divine You Wellness will give you tips and advice, to know more Click here to Login/Register.

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