Coronavirus: testing times for smaller businesses
Written by Oliver Little on 27 mars 2020
The current coronavirus crisis has created massive worry among businesses both big and small. Today we’re speaking to Andrew, an expert on the growth of small businesses regarding the growing worry among small businesses regarding financial stability. So tell me just what is the feeling among small businesses at the moment in Europe ?
<< The feeling amongst smaller businesses both in Britain and I think in Europe is one of uncertainty. It’s uncertainty about cashflow, and also about time. >>
And from what you’ve seen in your career, would you say that this situation is totally unprecedented ? I.e. have the dangers posed to smaller companies ever been seen before ?
<< It is unprecedented in the degree of unknown in terms of how many people will be absent and for what period of time, and what the access is to potential cash. >>
And what are these new dangers posed by the Coronavirus crisis that we haven’t seen for example in past epidemics such as SARS of 2002 ?
<< The speed of transmission and the necessary breadth of shutdown, which clearly poses unique challenges to those smaller businesses. >>
And for smaller businesses right now what is the biggest danger in these current circumstances?
<< Cashflow. Knowing when the next bit of income will come in, and also being able to tune costs accordingly. It is difficult to look at anything other than what is immediately in front of us. >>
If we take the example of the SARS epidemic in 2002 or any epidemic for that matter, in your working career have you seen any strategies that have been adopted that you think could be adopted and be effective this time around as well ?
<< A form of adaptation. Many small businesses are looking to do some business online – that transformation from physical to digital business is vital. The second part of that, how you can control that cost base going forward. >>
And now obviously you’re living in Great Britain, let’s take the example of Great Britain. Last week Rishi Sunak introduced a budget of £330 billion to help out all businesses. Just how far do you think this will actually go ?
<< It will provide some comfort and degree of sustainability as we begin to work through this. >>
And just this week he introduced a new scheme to help out the self-employed. Just how reassuring is that for them ?
<< It helps particularly those in service industries, who will be in a very difficult situation, to secure appointments and continue in their daily business life. >>
And Boris Johnson foresees that this crisis will go on 12 weeks, and potentially beyond. Do you anticipate that these budgets and schemes will have to be increased ?
<< If this crisis moves beyond 12 weeks, there will be a requirement to revisit how businesses have come out the other side of this lockdown, and look at extenuating funding to help them move forward. >>
Many companies in Europe have already had to close their doors, some still will yet. For companies that are yet to close their doors, what can they do to prepare to maximise the financial stability during this time ?
<< There is a need for reinvention and cost constraint. Moving online, adapting your products and services to this new digital world. There are gin distilleries in Scotland now looking to produce hand sanitiser to suit customers. And then how can you manage your cost base in response to that new offering ? >>
And if we talk about Europe for a minute now, do you see the same sorts of worries in Europe as you do in Britain?
<< The landscape for European businesses is very similar to that of British businesses. Concerns about cash flow and costs remain the same. It is my experience that European small business will be suffering in this uncertain world in the same way. You’ve got to be able to restructure your costs, your base, your use of resources to reflect these new demands. >>
And my last question for you, is there actually a way back from this for most, if not all small businesses ? Or is this feeling of fear, uncertainty, instability and precarity, is it justified because the coronavirus crisis really has the potential to cause the crash of thousands of smaller businesses in Europe ?
<< If businesses can be adaptive, if they can control costs, there is an opportunity to prevail. There will be those who are unable to transform, retain workforces and there will be some casualties, but I do believe that those that can maintain in this environment will prevail, both in the UK and across Europe. >>
Testing times in Europe for businesses both big and small there’s no doubt about it.