July 6, 2020
7 minute read
The emergence of the COVID-19 pandemic has proved to be the single most threatening socio-economic disaster in living memory. It has affected almost every facet of our lives in recent months including commerce and business across the world and it has had a major impact on small and medium-sized businesses.
Governments and business owners are grappling with the effect of lockdowns across the globe. These, as we all know, have led to business closures, job losses, and economic downturn.Ireland has not been an exception in this, and as restrictions ease, businesses and individuals are starting to look to the future.
According to a report by Enterprise Ireland in May, COVID-19 negatively impacted approximately 60% of businesses in the country.
Irish SMEs were some of the hardest hit.
This article will look at some of the areas of business affected by COVID-19 and what some businesses are doing to counter its impact.
A Shrinking Market
Although this varies depending on the industry and nature of the business, there is no doubt that most SMEs will feel the pinch of a slashed market. A lot of SMEs are dependent on local customers, with many businesses built on years of trust and service and many in Ireland being traditional bricks and mortar businesses.
With Covid-19, potential clients are avoiding unnecessary social activities, reducing the number of potential customers both prospective and real. This may well continue if a second wave occurs.Those within the hospitality and beauty sectors will continue to be affected with many restrictions remaining in place for the foreseeable future.
The Cash Flow Problem
All businesses, whether big or small, need sufficient cash flow for them to remain in operation. Having cash on hand allows a business to conduct small transactions and business’s needs. Covid-19 has led to many businesses and individuals holding onto their finances in fear of exhausting their savings before normalcy is restored. As a result, there is not enough money in circulation to help SMEs manage their day-to-day operations.
This has led to a decrease in the numbers returning to work and the hours provided to staff. Many throughout the country are still receiving the government COVID-19 payment without an end in sight.
The Halting of Business expansions and Construction
Many businesses have had to cancel, or halt planned expansion in business practices. Uncertainty has led to many businesses closing their doors for good, seeking a reduction in rent and going into arrears on properties and other investments.
Some planned construction projects have been halted for good, while others have slowly got back to normal.
Inability to Retain Employees
Some of the restrictions undertaken by the Irish government, to enhance social distancing have had a major effect on how business is conducted. Businesses with small working space have had to let some employees go, to keep up with the measures. Also, a reduction of footfall into premises mean businesses no longer requires the same amount of staff.
A Reduction in Products
SMEs like all businesses need a stable supply of products on a daily or weekly basis. Presently, the ability to get some products in time has been disrupted by the Covid-19 related restrictions. Suppliers are not able to deliver the products on time, first due to restricted movement and secondly because of a reduced labour force. Where big businesses can withstand such issues for a period, SMEs simply cannot.
Those within the construction industry have seen a noticeable delay in the manufacture and distribution of much-needed materials. This has resulted in the closing and postponement of some construction projections. Many contractors rely on such projects to meet yearly and monthly targets and these closures are sure to have major implications in the future.
Broken Supply Chains
Supply chains help get products to the end-user. Enterprises across Ireland are feeling the impact of the social distancing measures being experienced in the country. The movement of goods has been affected by movement constraints. Along with the transport of products many manufacturing facilities have been shut across the globe affecting existing orders and creating huge delays on new orders.
Companies such as Pennies have retained stock since mid-March, and this is the same for many smaller businesses.Many boutiques, hospitality and events companies and much more have had to cancel and/or postpone events.
What’s Next for Irish SMEs?
We can’t hide away from the COVID-19s negative impact on Irish SMEs and the country’s economy. Though the effects of this pandemic continue to ravage the economy, there’s no doubt that normalcy will return. It is, however, essential for businesses and individuals to create new solutions and businesses practices to survive the current situation and expand in the future.
Many SME’s throughout Ireland have begun to move online because of the pandemic. Placing their business and services online have allowed SMEs to retain some level of business throughout the past few months. We have seen many restaurants and food suppliers offer delivery and pickup options. MUA’s have moved their classes online and gyms and individuals have offered free training and programmes etc. among a host of other great ideas.
Artists and creators have advertised their talents online and set up stores. While many other businesses have used the time to develop and expand their existing digital presence including social media, paid advertising, and blogging. Channels which they may have not used traditionally.
A shift to the online marketplace and advertising has allowed both businesses and customers to find new clients, suppliers, and a way of conducting business. It may not be a total solution for what businesses are looking for in this uncertain time, but it does allow businesses to remain open, profitable and it gives businesses a connection to their customers, something that many miss at the moment.
Efforts by the government such as the COVID-19 Online Retail Scheme and online training are all new avenues that businesses may consider. If you are a business owner or SME now is the time to get online, expand your business and ensure the impact of COVID 19 isn’t too great.
Contact Everblue Digital today and we can get your online journey started.
Eoin Dolly is an experienced copywriter and content producer. His areas of interest include Digital marketing, Travel, Social media, and E-commerce. Having obtained a Diploma from the digital marketing institute and with experience in blogging and social media, Eoin understand the need for great copy and the power of SEO. When not working, Eoin can be found in his home county of Kildare or exploring areas across South America and Asia