The fate of SMEs post COVID-19
According to the World Bank, they represent about 90% of businesses and more than 50% of the employment rate worldwide. Formal SMEs contribute to 40% of Gross Domestic Product (National Income) in emerging economies.
The outbreak of Coronavirus (COVID-19) has been of great concern to SMEs worldwide leaving most SMEs in a temporary state of isolation. COVID-19 will undoubtedly have even larger, more complex and more long-lasting adverse impacts around the world, which will vary significantly among SMEs but what then becomes the fate of these enterprises after these adverse effects?
It is no doubt that regardless of the shape of the current pandemic, we will be experiencing a “new normal development” where not only economic but also social behaviours will drastically change and this might want to affect the functioning of SMEs. In the short term, the focus of SMEs is to stay alive through the capacity to adapt and act to the current situation. This does not only apply to sales behaviour but also implies identifying and adjusting to customer’s and supplier’s needs, preferences and services.
Nevertheless, the fate of SMEs post-COVID-19 is dependent on the hands of its operators. As a business owner, you have to now reconsider the “O” and “T” of the SWOT analysis. These are external factors that have effects on businesses.
Following the trend in the market today alongside the outbreak of COVID-19, what can be deduced to be the opportunities for businesses today? Opportunities can be viewed as external factors in your business environment that are likely to contribute to your business success. As a business owner, you will need to ask yourself the following questions:
-Is your market still growing and are people still going to buy from you during the pandemic?
-Are there strategies you can implore despite the adverse effect of COVID-19 to grow your enterprise?
-Are the current changes impacting your enterprise positively?
These 3 questions will help every business owner discover their fate during this pandemic. If the current pandemic is not impacting your business positively, how well have your executive board made out strategies to grow the enterprise despite the prevailing effect of COVID-19?
Several restrictions have been made as regards delivering physical services at different locations across the globe. However, adjusting to these changes will give your business another rebranding strategy. As business owners, you ought to adjust to digital technology and changes in technology in times like this so that you do not lose your market share. Despite the resulting effect from the current changes, do people still intend to buy from you? Let’s consider a foodstuff company as a case study. Over time people are being scared of purchasing contaminated produce and as such stop their purchases from several companies, but then do you still consider your services and produce interesting to them? This will cause new strategies of produce and branding to fit in the desires of your target customers.
Furthermore, threats are external factors that you do not have control over. One might want to consider putting in place contingency plans for dealing with them if they occur. Before venturing into any enterprise, threats are being proposed but the outbreak of COVID-19 seems to be astonishing to most business owners. As business owners, you might find the current pandemic a threat to your enterprise and as well might lead to certain changes in the business and market. Finding the current pandemic a threat to your business is not a false ideology, however, it becomes a plague to your business if you get submerged in it. You do not get failures at the emergence of new developments but by getting submerged in outdated developments which will lead to you becoming of no relevance and no value. The outbreak of COVID-19 has become a threat to so many businesses wherein some business owners have already decided to have a lockdown of their business until the crisis is over. This tells the future of that business as it is already subsiding and losing its market share as other competitors in the space are working towards adapting to the crisis.
The growth potential of many SMEs is hindered by a failure to define the business’s long-term value. Being able to articulate this helps an SME to develop a more effective strategy for enabling growth. In times like this, SMEs ought to have a clear definition of their long term value. COVID-19 has undoubtedly caused a change of plans in most SMEs but a clear vision to work within the long run will add to the fate of SMEs post-COVID-19. In the world today, most management teams in SMEs are better supported by technologies that help them to standardize operations and processes.
This is keen and requires management teams to address ever greater complexity as these activities increase in volume due to a growing business. Despite such technologies requiring SMEs to upskill and recruit staff in order to use them, it can frequently mitigate costs through the subsequent productivity gains that are generated. As research demonstrates, there are a number of practical steps business owners can take in the strategic development of their business in order to maximize their best chances of achieving it and working effectively during an out-breaking crisis.
All of these will count on the fate and the future of SMEs post-COVID-19.
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