Small and medium-sized businesses have taken many steps to mitigate the effects of shutdowns prompted by the coronavirus pandemic, and expect to continue evolving as the impact of the virus permeates the business landscape. Entrepreneurs are demonstrating their resilience and evolving in areas never seen before to ensure that they stay in business and come out the other side of this.
That’s the word from a recent report published by global payment network Veem. The company surveyed 690 small business owners during the final week of April 2020, and found that 87 percent of them are taking actions to prepare for an economic slowdown, while the remaining 13 percent aren’t taking any measures. Of the entrepreneurs who are taking action, the following list shows the steps they currently have in motion:
- Applied for Loans: 58.63 percent
- Decreased Operational Costs: 51.76 percent
- Protected Cash Flow: 42.6 percent
- Decreased Debt: 19.54 percent
- Changed Suppliers: 6.72 percent
- Increased Pricing: 5.5 percent
Cutting costs, protecting cash flow and seeking loans are the top three measures entrepreneurs are taking, but decreasing debt isn’t far behind. “This feedback supports that working capital and financing options for small businesses continues to be a key pain point and area of importance,” Veem notes in the study.
Vast Majority See Impact from COVID-19
More than half of the businesses polled say they’ve already seen the coronavirus pandemic impact revenue for the year, while 81 percent say they anticipate a long-term impact on their businesses over the next 12 to 16 months, showing how long small businesses expect the effects to linger.
To counter the impact of those issues, business owners say they are finding new solutions, financing options and markets so they can continue operating, Veem said in the report. The majority of respondents also expressed that they are seeing significant effects to their supply chains, and are taking measures such as diversification to protect the flow of their services and products. The following ranked among the most common ways that entrepreneurs are offsetting supply chain disruptions:
- Investing in New Tech/Aligning IT Systems: 24.29 percent
- Rapidly Pivoting Supply Chains to Make Much-Needed Supplies: 22.88 percent
- Cross-Training Employees Across Different Roles: 20.62 percent
- Setting up Regional Supply Chains: 11.3 percent
- All of the Above: 20.34 percent
“One inspiring theme that we see throughout the report — despite the anxiety and uncertainties of today’s climate — is that small businesses are fighting back and showing resilience,” said Veem CEO Marwan Forzley in a release about the study.
Most Are Seeking PPP Loans
About 65 percent of survey respondents indicated they have either already applied for one of the Small Business Association’s Paycheck Protection Program loans or plan to do so soon. Their top three priorities for using the PPP money are employee paychecks, bills/expenses like rent, and investing in new technology.
When it comes to staffing, about 54 percent of respondents said they’re planning to freeze all hiring in the near term, while 23 percent aim to downsize staff. On the plus side, 17 percent of those surveyed said they’re actually increasing the staff training and support at their organizations.
Visit Veem’s website to read the entire report.