As we all know, Covid 19 or the SARS-CoV-2 or the Severe Acute Respiratory Syndrome Coronavirus 2 was first discovered in Wuhan, China as certain and rising numbers of pneumonia with unknown cause and informed WHO for it. The new disease discovered, Covid-19 has been a cause of many sicknesses to the people, and the worst that many people have lost their lives. The world has declared a pandemic where people get isolated if they experience any of the symptoms and people are not allowed to go out unless for purchasing some necessities for the family. The world shut down and paused while the people knowledgeable traced and find a cure for the newly discovered disease. The impact of COVID-19 on Micro, Small, and Medium-Sized Enterprises was severely affected by this disease. Many businesses were forced to shut down and close causing them to lose some people’s jobs and a livelihood to feed the whole family. The small business experienced the great impact of COVID-19 on Micro, Small, and Medium-Sized Enterprises as they just right enough funds to support their business.
According to a study created by a bank, small and medium businesses are the backbone of the Asian economies that help support our country. SMEs are described by anyone who can do business in the comfort of their home, a local retail store, and anything that puts a small business in an area. There are categories of small and medium enterprises that we need to understand before going into the detail about the effects of the pandemic on them:
Small Enterprise is what we call a small business that usually has and employs employees with a small number of workers and does not profit and produces a high volume of sales. It is an operated and independently owned company that is only limited depending on its size and its revenue. These are what we call privately owned sole proprietorships, corporations, or partnerships. These enterprises usually exist in every type of industry available in the market. They are the small stores in local cities to small plants in the cities. It usually employs 10-50 people to work for small companies and businesses. Examples are your local bakeries, your local grocery stores, law firms, privately owned restaurants, dry cleaners, pet shops, and any small business you see every day on the streets of your local homes.
A medium enterprise is called the bridge between small and big corporations. It is where the small businesses start to grow more in their revenues. They start to employ more employees but not more than 250 workers work for them. They tend to earn slowly and surely from becoming a start-up business for a few years with low and small business sizes. They start to expand their business and slowly transition to a bigger company to become a big corporation. As they do these, they start purchasing their buildings, and equipment and recruit more people for their business.
One of the impacts of COVID-19 on Micro, Small, and Medium-Sized enterprises has greatly affected the supply and demand of how we conduct business and our economy. On the supply of our economy, it has caused a reduced workforce and labor force which caused a shortage of raw materials, production of raw materials, and goods that the SMEs need for it to start working again. SMEs usually do not store a large number of supplies for their goods and tend to just order raw materials when it is just needed as they do not have large storage facilities to store them and they do not have enough resources or money to store for all time all of these are due to workers illnesses, and quarantines. In the demand of our economy, customer spending has greatly decreased due to employment problems, reducing the number of work hours, and laying off of workers for the corporations all of these are results of the drastic change in the market and the revenue of the SMEs. These have caused the SMEs more debt and less money to liquidate their business and continue rolling. As the pandemic sill continues, the demand is also decreasing causing to further harm to them. Low demand means a low workforce needed for them and may result in an increasing amount of unemployment rate in our country. A low unemployment rate can cause more harm as this will result in low consumer spending because they do not have enough money to purchase goods and items. Due to some COVID-19 restrictions like social distancing and safety protocols, they are the ones that are greatly affected by it.
The impact of COVID-19 on Micro, Small, and Medium-Sized enterprises greatly affected their credit lines as well as it is difficult for them to restore the liquidity and cash flow of their small businesses. It is generally known that they have fewer cash reserves and only a few days to survive without earning from the business causing more job opportunities at loss may result in the insolvency of their businesses and declare bankruptcy. It is now up to the government to decide and plan on how they could help the SMEs in our market. The government could provide loans to SMEs and through these, they could provide liquidity and improve their cash flow and the cycle would continue. They should continue and provide these loans to help the SMEs, especially in the critical and certain sectors of these SMEs. They also issue special tax policies for the local SMEs to help them regain their strength back to business and bring it back to life. After all, the SMEs greatly support our economy and help put work for the people in their local areas and the cycle would continue. Supply will increase, more work will be given, and demand would increase as people now have jobs to purchase and it goes on and on.
The use of technology
As the world took its pause, many businesses were forced to transform their businesses readily available to the online market. Many people were forced to work from home making more and more people access and use the internet for business through their mobile phones, laptops, and tablets. People are more bored during these times as they are stuck in their homes doing work. They mostly rely on their gadgets, especially those times when people have limited movement and are only allowed to go out when purchasing their necessities. Making your business readily available to the market 24/7 and reachable by their fingertip is the most feasible way to make your business work. The Impact of COVID-19 on Micro, Small, and Medium-Sized Enterprises is hard to cope with but by transitioning your business online it could somehow survive during the hard times.
Here are some tips to help you start your online business:
1. Determine your market and your business
Identify your niche or your focus market. Identify their needs, movements, and target audience. It can be grouped into their hobbies, personalities, interests, purchase behavior, and others. To deliver a greater service or product and believe that your business will work, check your target audience if they possess the following:
- Check for your competitors and see if there is anyone already doing your business idea
- They are willing to pay even a certain amount of money to solve their troubles or problems
- They have enough income or resources to buy your product and can be able to be loyal to you
If they all fit on these, then the business you have in mind will work. If you create a product that no one needs or wants, then it would be hard for you to sell your business to your market or people.
2. Conduct Product Research
These are the three items you could sell digitally:
- Physical goods or items
Physical items are needed to be stored in an area and incur additional costs on it. It also includes man-hours to produce these items and may have a lower profit margin because of the costs entailed in it.
- Digital downloads
Digital downloads are very in these days are used for learning, reading, and even for recreational activities such as games and the like. These are the things that people can download on their mobile phones, tablets, computers, and laptops. These have higher profits compared to digital goods or items but naming a price on the digital downloads is hard as they are perceived to have a lower value than physical products.
Services are offered online but could entail your man-hours which are limited and your income is limited also. It is the fastest way to earn and start an online business is to offer your services to other people. One way to boost and increase sales is by hiring an agency for it.
3. Learn about business laws
Business laws still apply to starting an online business. Online businesses just have fewer licenses and permits rather than traditional businesses. They just need to know the details such as what kind of business, what is the company structure, what permits you to have, have you passed the inspections, whether you already have a sales tax invoice, laws on workers, and special laws for online businesses.
4. Conduct Market Research
Market research is important to help you determine if someone wants to buy your products. It will also help you determine your correct pricing points and such areas for improvement to increase your business. These are some ideas on how you can start your market research:
- Check your online competitors
Searching and looking for certain keywords applicable to your business, would help you determine your competitors and how are they doing, and how strong they are by using their technology.
- Study your competitors
By doing this, you can have a background on the things they do in their business. You can use this as an advantage to make it work and to improve further your business. Offer what they do not offer.
- Track the strong keywords
By doing this, you can bid for the correct keywords on the internet. These keywords are used to show on the top list of your customer’s research on the internet. Usually, people tend to click on the first or second website that pops up. Building strong keywords and bidding for them can help your business grow.
5. Determine your Target Audience
To earn and proceed with your business, you need to understand the movement and know your market well. Research demographics which are age, gender, income, job, etc, and their psychographics such as values, beliefs, interests, and opinions. When both are attained you will determine your market needs and supply them with these needs in the future.
6. Source the correct products
To succeed, get the correct products you source to make up for the products you will sell. Source the quality and worth buying products to avoid failure on this. You can also make your products, use a drop shipper or businesses that can deliver directly to your consumer and you do not store them, look for wholesalers that can help you source your products cheaper
7. Start creating your brand
Creating your brand is the most important item on your list. Doing this will help you easily determine yourself. Building a strong makes a company work better through brand recognition. You need to establish your colors, logo, typography, graphics, and photos and these are stored in a brand book where you will always look back for creating materials on your brand for people to easily remember you by just seeing the colors and your logo.
There are many ways to help regain your business back during the hard times. You just have to be creative and stand firm on your beliefs and people will follow.
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To know more about Bria Homes and you want to start your business in the major key cities near your home. Click here.
Written by Yna Faundo