COVID-19, the disease caused by the novel coronavirus (SARS CoV-2), has had a colossal effect on small businesses across the country. After the declaration of the disease as a world pandemic by the World Health Organization, several measures have been taken by different governments to contain the spread of the virus. The different measures have affected small businesses in different ways. There will certainly be financial shifts that business owners will have to grapple with, and we will discuss few briefly:
Many businesses are locked up at the moment to curtain the menace of the virus. Again, many people are out of jobs due to the pandemic. This means less money is in circulation, and small businesses are affected the most. Even after the crisis must have been resolved, it will take time for businesses to recover from revenue losses they have suffered. It will also take a while for customers to start spending as they used to do in the past.
Cash Flow Problems
It is a known secret that most small businesses die because of a lack of cash and not a lack of ideas. Due to lost sales and other problems, the chances of cash flow issues are high. Keeping up with operational costs is already hard for most, and it is unlikely that the issue will go away easily.
Stalled Funding From Traditional Investors
It is also expected that funding from traditional investors will stall, even after the coronavirus crisis must have been resolved. The disruption of almost all business activities means investors will be hard-pressed for funds after the pandemic. It will be hard for big businesses and harder for small business owners to raise funds.
Grants and Other Non-Equity Cash Sources
Already, there are financial assistance programs like government grants to help small businesses deal with the disruption of business activities due to COVID-19. The SBA programs and a number of other non-equity cash sources will be the mainstay of small businesses during the pandemic and months after it must have been resolved. Smart business owners will have to be creative about where to source for cash to keep their business afloat.
COVID-19 has had a devastating effect on the world economy as it stands. The ripple effects will continue to haunt us, even after the problem must have been resolved. Small businesses are at greater risks, just like hourly employees. The few points above are possible financial shifts. Creativity will help some small business owners to handle the problems. It is important, however, to stay alert for the inflection point. We can’t predict when it will happen, but great opportunities will arise after the pandemic, and vibrant businesses will benefit. Lower cost of marketing is an exciting avenue already, but you must know the right time and right means to reach out to your customers.
As PCBancard, we help merchants to offset some or all of their merchant service fees without increasing the overall rates. Contact us below if you need help.