Challenges for SME’s Post COVID

1
Challenges for SMEs Post COVID
2

• The world is at war with the present tragic event
  COVID-19 or Coronavirus, as we name it. this is
  often a bio-war scenario that has left the whole
  planet abandoned and confused by how one virus
  has taken it to a halt. within the wake of all
  this, the economies of the respective countries
  are struck hard. especially , the SME sector is
  faced with the most important potential backlash.
• SMEs contribute to the event and growth of an
  economy. they assist in creating jobs, making
  countries self-reliant, and also aid within the
  effective use of resources.
• The constraints on transport and borders, social
  distancing and lockdowns have disrupted supply
  chains, decreased market demand and reduced cash
  flows. As a consequence, small businesses are
  unable to pay store rent, wages of workers,
  suppliers and creditors, creating a spiralling
  impact on households and therefore the economy.

3

• Many small businesses were met with problems
  before the pandemic struck, and COVID-19 just
  aggravated them. Here are some main struggles
  faced by Smes
• 1. income Shortages
• The obvious concern about the weird existence of
  the novel coronavirus is that nobody knows how
  long it can affect civilization. Many small
  business owners know its prudent to save lots of
  for emergency circumstances, but they dont
  expect these desperate conditions to last for
  months with without stopping in view .
• SMEs should be ready to adapt their monetary
  capacity consistent with things within the
  crisis. Many supply chain firms are trying to
  find credit-based maintenance of the availability
  chain. income maintenance may be a huge problem
  for companies currently facing losses thanks to
  decreased cash reserves or unstable cash flows.
• SBI also reported a transition within the small
  business lending rating model from asset-based to
  cash-flow-based funding. this is able to be a
  game-changer, contributing to easy financing for
  companies that don't match the traditional
  capital structures of major firms that banks use
  to finance.
• 2. Worrying over limited workers
• Occasional cycles of rising tensions and worry
  are common for little business owners to feel it.
• However, coronavirus-related influences have
  given rise to new issues that have driven
  uncertainty and concerns to new heights and added
  others that nobody certainly didnt expect to
  ascertain . Worries of limited workers are
  disturbing the flow of labor . Therefore going
  digital can reduce this concentration risk
• Businesses could also be pretty small in number,
  but large in range, meaning that they're not at
  the control of a couple of consumers. Digital
  could also be genuinely inspiring during this
  sense. a couple of weeks ago, the weavers of
  rural Bihar, with their inventory of garments
  stuck thanks to lockdown, were ready to sell the
  sarees via Twitter promotion!

4

• 3. Decreased Revenue
• Another problem associated with small businesses
  and COVID-19 may be a decrease in sales. It could
  happen for a few reasons. you'll own alittle café
  and have had to drastically limit the amount of
  diners accommodated directly thanks to social
  distancing steps. Alternatively, you'll only have
  a brick-and-mortar store and dubious online
  retailers have grabbed a bit of your business
  while more customers like better to sit reception
  .
• consistent with a recent GoDaddy
  Entrepreneurship Study, 83 of small Indian
  companies registered a drop by sales, and almost
  half them had to pack up their businesses. For
  several small enterprises, the outlook isn't
  clear. because of this situation, many
  organisations got to rethink the way they add a
  replacement normal climate. The survey stated
  that 45 per cent of small companies had to form
  improvements to the way they worked thanks to a
  worldwide pandemic. a considerable number of
  small companies in India are affected by
  decreased financial expenditure as a results of
  the Covid-19 pandemic.
• 4. Supply Chain Difficulties Hindering Operations
• Small companies should apply for supply chain
  funding, which allows them to urge cheaper credit
  from banks on the idea of the comfort factor
  offered by MNCs that use their goods/services.
  Not only is that the Indian MNC guaranteed
  support from the banking sector, but its tiny
  vendors (who might not be known or have adequate
  negotiating power) are now ready to access cheap
  financing such the entire supply chain is well
  prepared for global competition.
• Secure the availability chain by engaging with
  the regular vendors and deciding if they will
  satisfy your demands soon. Investigate, if
  possible, how new suppliers could help to fill
  the defined holes. If supply chain issues concern
  consumers, be frank with them about potential
  shortages or lengthy inventory outages. allow
  them to know all youre doing or have done to
  mitigate problems.

5

• Many countries are now deploying a good sort of
  policy instruments to help small and medium-sized
  business and, especially , self-employed citizens
  during this highly tough time. The immediate
  priority is on addressing short-term liquidity.
  Such policies have different forms, and here are
  a number of the foremost common
• Payment deferral Income taxes, property taxes,
  excise duty and other contributions paid by
  companies to the govt are postponed to alleviate
  the liquidity restrictions that SMEs face.
• Credit Government expands the availability of
  credit to small and medium-sized businesses
  employing a sort of approaches direct lending by
  state-owned banks, lowering interest rates on
  special lending projects or easing the monetary
  policy of the financial institution , expanding
  the utilization of credit guarantee systems, or
  extending grace periods on existing loans.
• Wage assistance the govt bears, in part, the
  burden of delivering salary and income assistance
  to workers temporarily laid off or to businesses
  to safeguard jobs.
• The new normal would cause improved
  intra-regional trade as countries steadily ease
  their trade and border restrictions. Governments
  must help to encourage exports, increase internet
  access and increase shipping connectivity. In
  Sabah, the govt is creating a trade zone to
  facilitate exports, also on help market, brand
  and distribute goods online.
• To conclude, the pandemic has affected the SMEs
  but also gave opportunities to extend their
  maximum reach within the market.