Is your business facing downstream this pandemic? Your sales have dropped, customer retention has decreased as it has been never before. The COVID-19 pandemic has created vulnerable situations for businesses worldwide, regardless of scale, place or funding. Facebook has published a report that states the situation of small and medium-sized Enterprises in COVID-19. They have surveyed around 86000 managers and decision-makers of different companies in various sectors across the US. This survey has portrait the actual struggle of SMEs that has been taken place because of COVID-19. Businesses that were going around just fine before the pandemic are now on the verge of bankruptcy. Small businesses are winding up their operation. According to the research conducted by Facebook, in the past three months, 31% of small and medium-sized enterprises have closed down. They are facing the dire impact of COVID-19. The situation is even worse for personal businesses. Hotels, cafes, restaurants, grooming houses, travel agencies, fitness centers are on the verge of closure.
The Facebook report also suggests that 52% of personal businesses are shutting down due to COVID-19. Sad enough but such personal businesses are not currently operational or engaging in any revenue-generating activities that would help them address the problems created by the pandemic. There are multiple reasons that are working behind in the creation and sustention of this situation; these are lack of client demand, financial challenges and non-compliance attitude of concerned authorities. Let’s go through them one by one.
Lack of Client Demand: given the pandemic, access to capital and customers have dropped significantly. Ever since the pandemic has started in full force, we have witnessed price inflation and scenario of demand exceeding the supply across the globe. Recession is knocking at the door. With lower purchasing power there has been a lack in demand of the clients. Market unavailability, closure of the important borders, and non-coordination of the government are adding fuel to the fire. Day to day activities has been hampered which has resulted in broken supply chains. Restriction and delays at border have slowed down coordination among the intermediaries. For this reason, SMEs are losing in the fight to combat the pandemic. However, there are still a few persistent SMEs in the market. In order to survive in these troubled times, they cannot but increase the price of their offerings. On the other hand, with decreased purchasing power there has been a major shift in the consumption pattern of the mass. The priorities have changed. At present, managing cost-of-living is the number one issue. The rest comes in second. The cost of living fluctuation has created a big impact on the consumption pattern. All of this has resulted in a sink in client demand turning as a heavy blow to SMEs.
Financial Challenges: Finance is the engine of any business. In the current situation, it would be no surprise if financial challenges end up causing the most well-tuned business to break down. Sales and cash flow have a very delicate relationship. Maintaining a steady cash flow has always been a major challenge for small and medium-sized Enterprises. Pandemic has only escalated the intensity of it. You will see most of the companies cutting down their operational costs either by sacking their employees or by closing down less significant department of their company. It must be noted that any time a business is forced to lay-off staff, whole communities of people who are dependent on that job’s income to support themselves become vulnerable.
Even so, you will find a few companies who are surviving just fine even in this troubled time of the pandemic. One thing that is common in such companies is instead of compromising with their decreased sales, they have bravely adopted measures that will in the long run increase their sales. Most of such winner small and medium-sized enterprises have opened an online channel for their business. As soon as they have realized decline in their offline sales channels, they have gathered their resources and devoted them behind their online sales channels. You have probably noticed a few of companies that never had an online sales channel now using it as their prime business methods. This way they were successful in keeping a steady sales margin. In reality, the Internet remains a lifeline for many small businesses, allowing them to stay submerged throughout the pandemic. Even if it had caused them a lump sum money in the beginning, but at the end of the day it was proven as a worthwhile investment.
Non-Compliance Attitude of Concerned Authorities: In many parts of the world you will find the state authority stepping in to combat the challenges originated by the pandemic such as border issues, Export-Import issues, tax issues and so on. But the majority of countries cannot however bring any favorable changes. It is not that they are not willing to address the problem but even if they are willing, they don’t have enough resources and capabilities to bring such changes. Issues like poverty and unemployment are still the biggest problem at their end. Yes, you are guessing it right. I am talking about developing countries. Developing countries have limited resources and weak economic structure. The socio-economic pressure is more extreme in their case.
But many SMEs have also found innovative ways to combat COVID-19 and find different ways to offer their goods and services. We have seen them expand to new markets. Furthermore, much offshore software development company is developing new avenues for small and middle-sized businesses to communicate with their clients. Even these new online channels do not cover the entire lost sector, it is significantly helping them to be operational and engage actively in revenue-generating activities. And this is the difference between staying alive and going under for many small businesses during this time.
If I talk about the responses, I got from the decision-makers of various software development companies, I would say enterprise E-Commerce solution, E-Learning solution, Restaurant Management solution, Food Delivery App are the hot sales. With a greater trend of work of home, companies are now adopting various enterprise solutions such as CRM and ERP. For manufacturing firms, the hot sales are ERP, PDM and PLM. SMEs are more into web and mobile apps. Why wouldn’t they? It is driving positive results for their business. It is also helping them to gain a competitive edge. By choosing the right software development company, you can also enjoy complete control and improved business integration. There are a few best AI and machine learning solutions providers in California. There is one software development company in South Asia that has gained a lot of name and fame for themselves in the past few years. Sony, Panasonic, NTT Data, Toshiba, Valmet, Metso are companies they deal with. If you are looking for a trustworthy custom software development solution provider then Visit BJIT. It is high time that you should invest, innovate, expand, and respond to new changes that have come into existence because of the pandemic before it is too late.
