Saturday, 28 August 2021

How are small businesses affected by COVID – 19?

COVID – 19 (Corona virus) is a big pandemic that has not only impacted the health and the lifestyle of the people but is having a great impact on the economy of the world. This pandemic is having a major impact on small business. Though it is having impact on corporate and large businesses as well but is mildly impacted. But it has a great impact on small businesses and labour society both nationally and internationally.

The COVID - 19 pandemic is having both the positive and negative impact on different kind of businesses. For example, the small travel agencies and transport businesses are facing major losses these days while pharmaceutical companies, manufacturers, medical retailer businesses, etc are booming.

Though it has stopped several business opportunities but has also created some business opportunities. For examples, now people on small scale can start their manufacturing or retailing business of masks, sanitizers, etc.

This pandemic has also impacted the method of business as well. Now the businesses are more dependent on digital technology. People these days are selling and communicating with their clients digitally. This is somewhat a positive impact as it has widen the community and thus enhanced the growth opportunity of the businesses. Since, everything is digital now and it is going to be continue for several further years and thus people can sell their product not only in their local proximity but internationally and in broader area as well.

Here in this guide, we are going to discuss on how COVID – 19 pandemic has impacted on small businesses. So let’s get started:

How COVID – 19 pandemic has impacted on small businesses?

Following are the impact of COVID -19 pandemic on small businesses:

Positive impact of COVID- 19 on small businesses:

Self dependency:

The positive impact of COVID - 19 pandemic is that it accelerated the trend of self-dependency. Now instead of depending on jobs, people are attracting more towards their own start up and are also taking action to execute their plans. This way, they are making less dependencies on employment and are generating more employment opportunities for others.

Digital campaigns

Though the digitalization of businesses is not a new practice but COVID -19 pandemic has accelerated it and has extended this to small businesses as well. Before pandemic, there were only corporate and large businesses along with some small businesses that were performing digitalizing business practices. But now almost every small business owner is performing business activities on digital platform.

Whether it is dealing with client, or explaining the specifications of products, everything has gone digital. Both the customers and the business owners are contacting on digital platform. Customers are placing order digitally and business owner confirming it and then completing the order bu delivering to their door step.

This is not only eased the customer buying habits but has also increased the growth opportunities for business owner as well. Now not only the corporate can business internationally, but the small owners can also accept the orders from the international customers without leaving their hometown.

Make it feasible to start business in less capital investment

Since, COVID – 19 pandemic has started the trend of buying online, now anyone can start their e-commerce store online and start selling. There is no need to invest in a shop. Just start your e-commerce website and accept taking orders from customers.

Strengthened the local business

As not the transport from international market is closed, people are started relying more on the local products and the products from local small companies. 

Drop shipping

Drop shipping is not a new idea but its trend increased after the pandemic hit the world. This is a great option where the person can start their business with very less capital. People can just start their online store and show products from any third part. Now accept orders and forward it to the third party after taking their commission. It is having less risk as there is no major investment, no worries of keeping incentives, and the third party is liable for delivering the product to the final customer.

The trend of drop shipping increased only after the trend on online business increased. The pandemic is having a great role in increasing the online business trend for small businesses as well.

Negative impacts of COVID – 19 on small businesses: 


No doubt, COVID – 19 pandemic is having a negative impact on the economy. GDP is going down and small businesses are facing major challenging time. But, it proved beneficial for medical, health related, and pharmaceutical businesses.

Stock limitation

As manufacturing companies and factories are close, thus there is shortage of stocks as well. Also, due to the temporary ban of transport, the supply of inventories is insufficient and this leads to the shortage in stocks.  

Impact on small manufacturing companies

Most of the factories are closed. Those which are having the permission from the government to keep functioning, they are facing shortage issues of raw material. Transport all over in the world is troubled and thus supply of raw material is becoming a major issue for manufacturing companies.

Also, since many retail companies are not functioning, the demand of the products have also decreased. For example, most of the clothing retailers were closed in pandemic time, and thus the demand of the cloths were very less.

International trade

Those retail businesses that are using to sell products from international market also faced heavy loss. Since, the transport from the international market was completely closed, there were no supplies and thus no business activities or limited business activities.     

Shutting down of several kind of businesses

It is the major negative impact of COVID -19 pandemic on small businesses. Though it proved beneficial for many businesses but is hazardous for many more businesses. Like small business owners of transport and travel companies faced major loss. As the travel is closed all over the world, many companies are facing shutting down stage and thus are degrading the financial position of many business owners.

The bottom line

So these are some major impact of COVID – 19 pandemic on small businesses.


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