Some of the states with the largest outbreaks, such as Michigan, New Jersey and New York, also have the highest percentage of small businesses at risk (Figure 5), likely due to their stricter lockdown rules. 6 6. The percentage of businesses in a state that report experiencing a “significant adverse effect” of COVID-19 correlates with the number of cases in that state (0.64), far more than that state`s population (0.39). The high proportion of vulnerable businesses in Alaska shows the role of the industry mix. COVID-19 has disproportionately affected the state, and Alaska has a higher proportion of businesses in the most vulnerable sectors, particularly housing, hospitality, transportation, and warehousing. How has the crisis changed the way businesses operate? Business leaders, policymakers and stakeholders in general can do their part to support small businesses during the crisis. Compared to other business surveys, the BICS and DMP surveys draw large samples that are supposed to be representative of registered enterprises in the United Kingdom. They provide timely quantitative information that can be broken down to better understand what`s behind the headlines. They are carried out frequently – every two weeks for BICS and monthly for the DMP – and are carried out online. In most cases where they cover the same topics, BICS and DMP data tell an broadly similar story. Differences in vulnerability between sectors also pose a disproportionate risk to low-income workers, minority entrepreneurs and entrepreneurs with low levels of education. The most vulnerable sectors have the lowest median income among the four quadrants, at about $13,000, one-third less than the median average income of the other three quadrants (Figure 4).
As tech companies closed their offices and stores and prevented their executives from traveling to the affected areas, this negatively impacted supply chains. For example, manufacturers in China are the main suppliers to technology companies around the world. Manufacturers affected by the coronavirus are not delivering on time, which is impacting various tech companies. These restrictions are slowing down operations in some industries, while some are less affected by the pandemic. Finance, entertainment, technology, hyperlocal market, travel, retail, hospitality – let`s look at the impact of the COVID-2019 outbreak on these industries. On the other hand, IT companies are recognizing the benefits of outsourcing more than ever. Remote work has been fostered in the midst of COVID-19 and therefore functions such as software development and maintenance are the least affected by the coronavirus. Looking at the nominal declines in sales, oil giant Royal Dutch Shell suffered the biggest loss of all companies analyzed in 2020. The company`s revenue fell by $164 billion between 2019 and 2020, largely due to the dramatic drop in oil prices during the coronavirus pandemic. Overall, half of the top 20 firms with the largest declines in nominal revenues were in the oil and gas industry. The differences between sectors depend on the severity of the impact of COVID-19 on them and the likelihood that affected businesses will close (Figure 3).
Not only small businesses with known challenges such as restaurants and hotels are severely affected. This also applies to other small businesses in the fields of education, healthcare and social protection. Many private education services, children`s education centres, sports classes and art schools where physical distancing would be a challenge could become vulnerable. Similarly, small healthcare businesses – including ambulatory care (such as dental practices) and small private practices that may be reluctant to visit patients in person – are also severely affected. The Paycheck Protection Program provides small businesses with the resources they need to maintain their payroll, hire employees who may have been laid off, and cover overhead costs incurred. Shopping malls and malls are temporarily closed due to COVID-19. As people move away from social gatherings and crowded spaces, they prefer to order their favorites or necessities online. The situation is similar for retail. In addition, minorities own a quarter of small businesses in the hardest-hit sectors, compared to about 15% in the least affected sectors. We only considered the impact of the sector mix, but other research found that minority-owned businesses are also particularly vulnerable, as they tend to have lower resilience. Contractors with only a high school diploma or less are also disproportionately exposed, as their businesses tend to operate in less resilient sectors, particularly construction and services (such as repairs, maintenance and laundry), where a third or more of contractors had at most a high school diploma.
Businesses in sectors that are now severely impacted by COVID-19 will likely need relief efforts focused on improving revenue and reducing costs. However, less resilient small businesses are unlikely to benefit from programs that require strong existing banking relationships, 10 10 www.vox.com/2020/4/7/21209584/paycheck-protection-program-banks-access. They may therefore need new or special forms of credit. Even in more resilient sectors, ensuring access to capital for less resilient small businesses could also help create a level playing field, especially for minority-owned ones. The least impact was expected in other manufacturing industries (agriculture, mining and quarrying, and utilities) and in information and communication, all of which are less likely to be affected by lockdowns and other restrictions. In addition, companies will differ in their ability to withstand disruptions (for example, due to available cash) and in the decisions they make in the face of significant uncertainty about future business conditions. The travel and tourism industry has been hit hard by the coronavirus outbreak. Since COVID-19 is a pandemic, people are avoiding travel to different countries and cities, which has negatively impacted the travel industry and the tourism benefits of the affected countries. The longer the pandemic lasts, the deeper the potential impact of the pandemic. Another two million small businesses are competing in sectors such as construction and manufacturing, which have fewer businesses that are now reporting the negative effects of the pandemic, but are also less financially resilient.