Business

SMALL BUSINESS CLOSED PERMANENTLY DUE TO COVID-19

Small business is the backbone of every country which is connected with half of the population in the world. The community that is connected with the Small business is Owner, manufacturer, Supplier, Seller, Employees and Buyer also affected and facing crisis due to the COVID-19. Every country like United State Of America, China, United Kingdome and Russia those were economically very strong on the basis of small industry now financially in great trouble and most of their small Business going to be shut down permanently due to the disease that affected the whole world.

As per a Online Survey made by Main Street America 7.5 Million small business are going to be closed permanently. It is a terrible situation which means the whole world will be affected by it. Business owner have no other choice to do it. Circulation of products and Money in small business category very quickly revoked by COVID-19 just in the start of March and the every person who was connected with it have nothing in his hand to fight with such kind of crisis and to stay home to save them. Around two-thirds of entrepreneurs said they may have to shut forever if business disruption continues at its current rate for up to five months, according to a survey published by Main Street America, a network of more than 1,600 commercial districts comprising 300,000 small businesses.

More than 30% small businesses are at risk if the status quo persists for two months, according to the Survey in United State America, which polled in excess of 5,850 small business owners. China economy is based on its small business product that is supply to all over the world markets. In March when the world countries saw the havoc affects of COVID-19 they banned the china products to supply and canceled the trade with China. Italy was the great example that set mind of the different countries which bought more than 50 %  small business product from China and the disease affect the more than half part of country and even the Leadership start weeping on this situation. China control the strict situation but its small business affected and most of the population that were connected with it faces the crises that will be recovered after a long time.

Global crisis faces by this Global World still continue and that is affecting and leaving its unsolvable marks on this world. Countries avoiding trades with other countries even when we will see the situation that the States, Provinces and Districts avoiding business relation with each other in a country. As per a report in United State of America Grocery Store were empty in earlier March and no new stock were available. Manufacturer and owner of business of grocery stores not sure about this fact  either what will happen with their products either it will be sell out or it will be in stores to see when this disease will be no more there. When they felt unsecure they closed their businesses and stayed home by thinking that this time is to save their self not to earn money. By this situation Businessmen avoid investing in the business that not ensure him either it will be profitable or he will lost everything.

Peoples looking for what they have to do now? Everyone is not clear about what they should do next. United State of America that is World Power facing the crisis in small business field, As in The Third week of April; the United State Of America  economy had been largely shut down to stem the spread of COVID-19. In just A Month, a record 22 million American workers have filed claims for unemployment benefits. Small businesses have been hit even harder by the social distancing measures and mandatory business shutdowns adopted in response to COVID-19.  This brief focuses on two major channels through which COVID-19 has impacted small businesses in the short term. First, social distancing measures have hit small businesses in certain industries harder than others by radically reducing demand for their services. As almost all Americans are required to stay at home, industries that require direct physical proximity with customers or coworkers are faced with plummeting productivity, sales, and revenue. Second, almost all state governments have explicitly required nonessential businesses to close their physical locations to suppress the spread of COVID-19. Thus, small businesses identified as nonessential lose almost all their revenue, given many of them find it difficult or simply cannot operate remotely. These two intertwined channels have a concentrated effect on certain sectors more so than others. If businesses in these industries are forced to close permanently, this will inevitably slow the economic recovery and lead to a jobs crisis.

Online shopping also change the focus of people which also create a alarming situation in small businesses. More than 50% of persons those were connected with small business affected by online shopping rate increasing. Buyers are avoiding markets and they are making their orders by online and this aspect hurting the chain of different earner and increasing the unemployment all over the world. As per different surveys and reports online business increased 30 to 40% and people avoiding to markets, shops and stores. Clothes is a great example of this in United State Of America 25% increased recorded in online clothes buying that disturb small business chain brutally.

  By compiling a list of industries directly impacted by COVID-19, we estimate that:

  1. At least 20 million employees in small businesses directly affected by the pandemic are at risk of being dislocated — being furloughed, becoming unemployed, or being forced to seek employment in more secure sectors.

    2. The mandatory nonessential business shutdowns that vary significantly across states could impact over half of all small businesses.

     3. At least 32 percent of all small businesses (firms with fewer than 500 employees), or 1.9 million firms, face serious financial challenges during the shutdown.

   4. Small business workers who are already vulnerable in the job market are likely to be hit harder, such as younger, less educated and nonwhite worker.

There will be no other way for small business community to except close their business due to the helpless condition. In United State Of America there is grants, loan on easy installments etc announced by Government that will be very handsome but the issue is that the community that is affected by COVID-19 is not possible to help everyone. Every business is based on Loan investment and owner have to give rents salary and other charges on monthly basis, when there will be only expenditure and not any income then in such like condition how a small business owner will survived and he will have not any other option to closed it, The 2020 Small Business Credit Survey shows that 86 percent of small businesses are not able to withstand a financial shock of two months lost revenue. Likewise, the median small business has only 27 days’ worth of cash buffer in reserve, with restaurants, retail, and personal services having even fewer days’ worth of cash buffer. These businesses, many of which are identified as at risk in this study, are likely to face immediate liquidity challenges created by COVID-19 shutdowns. Given the greater financial challenges accompanying the COVID-19 crisis, they need to identify and use all forms of assistance available to them to achieve financial stability during and after the pandemic.

Mostly Small businesses are at-risk industries such as food service, Retail And arts/entertainment traditionally provide entry-level jobs for younger and people with less formal education. As these industries are affected by the COVID-19, we found that vulnerable small business employees, who are primarily younger, less educated, and nonwhite workers, are more likely to be in alarming condition from the economic fallout from pandemic. Younger small business workers (under age 28) are the group most affected by business shutdowns. At the national level, 50 percent of younger small business workers are at risk, compared with just 25 percent of older workers (28 years old or older). A large difference can be found among groups with different educational attainment. Those without a bachelor’s degree are about 10 percentage points more likely to be at risk (30 percent) than workers who hold a bachelor’s degree (28.0 percent). In addition, nonwhite small business workers (black or Hispanic) have a slightly higher level of risk than non-Hispanic white (35 percent for black and 30 percent for Hispanic, versus 30 percent for non-Hispanic white) at the national level, in the moderate shutdown scenario.

When I will conclude my overall discussion I will found that the worldwide small business is affected and at about 40 to 60% percent closed permanently and not in condition to work again for years. Unemployment rate in developed countries 20 to 30% increased and in developing countries this condition still uncountable.Covid-19 affected the world economy badly but it destroys the world financial backbone small business that cannot be recovered again in centuries.

Tags

Related Articles

Back to top button
Close
Close