Updated: Jul 9
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How has Covid-19 affected businesses?
With the whole world on lockdown, people in and out of their home confinement, and the continuous worrying rambling of the media, the past year and a half not only have profoundly shaken people's livelihood but furthermore restructured the global economy. An outstanding economic shift has occurred, as a direct result of the widespread impact of the pandemic on all sectors of production. The way we live and work too has changed. Amidst this unprecedented upheaval, we had better take stock of the scale of its consequences, which begs the question: what can we learn from this crisis so far?
Social and economical impact of Covid-19
Let us not underestimate the extent of the problem at hand: this paralyzing health crisis has plunged the world into its worst recession to date ever since World War II, equally affecting supply and demand. While many lines of business have recorded an all-time drop in productivity, the heart of the issue truly lies in the decrease of both the supply chain and international exports.
However, in times of economic downturn such as ours, working in the right or wrong business sector is not merely enough of a satisfying explanation to understanding the gap in overall economic performance between businesses. While some unavoidably suffer more, circumnavigating the turmoil is first and foremost a matter of well-thought-out business strategy.
Despite being widely considered a flawless means of tackling the loss of earnings, cost management may sometimes surprisingly prove insufficient to redress the balance, mainly because not enough efforts are put into adapting to the fluctuating changes in the clients' needs and expectations. Likewise, businesses that double down on product or service quality are more inclined to fail at anticipating consumers' demands who, in periods of an economic slump, are reluctant to buy or simply favor cheaper products.
Assessing the impact of Covid-19 on industries
More than a year into this crisis, assessing the economic situation shows that, while smaller and average-sized enterprises encounter greater difficulties, some being forced out of business and others slowly winding down, the world, and the United Kingdom more specifically, have overall been holding out rather decently.
Whereas the pharmaceutical and food industry have almost made up their leeway and got back to pre-crisis numbers, the same cannot be said of other lower-production-rate sectors that used to thrive on customer interaction, such as catering, retailing, tourism, and sporting events, all badly suffering the effects of the implementation of recent social restrictions. It should therefore come as no surprise that the best to have ridden the wave so far are e-commerce platforms and businesses, as social distancing and repeated lockdowns have naturally redirected people to the Web, paving the way for an even more pronounced presence of the digital in our daily lives and practices.
The new emerging trend: teleworking
Until then very much negligible, the stay-at-home policies implemented globally have seen a sudden surge in teleworking usage, as a means of keeping up with uninterrupted workload. From one day to the next, businesses across the globe have had a knife to their throats, urged to promptly deal with this never-seen-before economic instability, and forced to redouble efforts to be on the ball. Managers and employees alike had to put their resilience to the test, adapt, and take the lead to keep things afloat. With teleworking, we have not only seen the emergence of a new more autonomous approach to productivity but moreover a reimagining of working conditions.
Remote work has shown to have a rather unexpectedly positive effect not only on productivity but also on overall well-being, with greater hopes for employees to better balance their professional and private life. As for businesses themselves, the higher rate of staff absenteeism has allowed for a restructuring of their headquarters and a noticeable decrease in fixed charges. Some even have consequently gone fully remote.
Digital innovation seems to have proven the most successful sustainable strategy for businesses to make it through this Covid-19 crisis. For one thing, fast and adaptable offers are more likely to forestall fluctuations in demand. For another, recruiters have wider access to potential candidates.
A crisis that hides another? Business funding solutions in the UK
Only time will tell, but realistically, the world is still awaiting this health crisis to die out and is bracing for its inevitable future economical consequences. For the time being, patience, supported by a strategic work effort, is key to resurfacing. With greater financial resources to dampen the effects of the virus more efficaciously, large-scale companies are getting by relatively unscathed. However, despite the government's efforts to make their Covid-19 Business Support initiative available to smaller companies, the fact remains that they are the ones more than ever faced with a rather daunting future.
At Funding Routes, with your interests at heart, you will find a team of specialists ready and waiting to help refloat those smaller and medium-sized companies badly affected by Covid-19 with the granting of term loans and other business funding options. Do not wait any longer for the virus to take its toll: contact us!