The effects of the COVID-19 pandemic have been felt around the world. It had a significant effect on businesses and has brought a lot of changes with it. The pandemic took a toll on markets, businesses, and global supply lines, causing huge financial disruptions. COVID 19 caused significant retail and business shutdowns (Alekseev et al). Policy requirements and health concerns, among other issues resulted in the shut of businesses, enterprises, and companies. Since the owners were not able to pay ongoing bills and withstand the closure, many of them were even permanent. Almost all enterprises all over the world are were severely impacted, big or small.
A business incorporates individuals’ organized efforts to produce and distribute goods and services that meet needs of the society for a profit. Business, then, refer to any enterprise that is aimed to make a profit by bringing individuals together to achieve a mutual goal. This is one of the most seen changes in business by the COVID 19 pandemic. The profits of many small enterprises and entrepreneurial initiatives were affected due to COVID19’s limits on social distance and health and economic-oriented demand changes. It caused a significant decrease in the number of business owners that are active in building, restaurants, eateries, transport, and service occupations. This was a result of several factors.
During the pandemic, many workers preferred to remain at home or were forced to do so as the pandemic spread. Self-isolation policies were optional in some areas while in some it was mandatory. Employees in non-essential industries were required to adhere to isolation measures in the regions that were substantially affected. This had an impact on the business at all levels, from cleansing to carrying goods across quarantined areas. This reduced the business profits in so many ways. Additionally, many firms were forced to close as a result of the epidemic, resulting in severe disruptions in the industry. Some difficulties face retailers and brands, including like those that relate to health and safety, distribution network, workforce, net income, consumption patterns, sales, and marketing.
Reduced demand was experienced depending on the industry and market. For instance, COVID 19 pandemic resulted in less demand for restaurants, travel and hospitality services due to the social distance limits, less production of goods and a limited number of employees due to health concerns (Donthu et al. 284)). Some of the industries had to relocate. Arts and entertainment, food businesses, and hospitality services all saw job losses of greater than fifty per cent; finance, and real estate-related services, on the other hand, had less changes because they were better able to relocate to remote production. This not only cost the businesses a lot but those businesses that could not relocate had to close down resulting in loss of any profits.
The change in consumption trends had an impact on some of the businesses. Consumer priorities have experienced a shift to the most fundamental requirements, causing an increase in demand for hygiene, sanitation, and products, whereas demand for non-essential items has gone down. The need for the fundamental needs of existence took precedence (Lenka 494). Personal health, unsurprisingly, took the top priority for the consumers. Other fundamental priorities included food and financial, personal, and medical safety. The consumers have been forced out of their habits due to the epidemic. They have developed new habits and behaviors. This affected other businesses that were deemed less important and eventually caused their closure.
At the beginning of the pandemic, the epidemic had already caused havoc on businesses and changed what they initially were meant for, even before government assistance through the CARE Act became available. About, forty-three per cent of firms had temporarily shut down, with COVID-19 being responsible for almost all of these closures. A decrease in demand and the workers’ health concerns were among the main reasons for these closures. These businesses could not get enough profit to hold them afloat during the pandemic leading to their closure. Most businesses that were hit by this took time to recover while some never recovered.
The COVID-19 epidemic plays as a reminder that such unfortunate and unexpected incidents, have happened in the past and are prone to happen in the future. If we cannot stop the epidemic from spreading, businesses should be ready to mitigate their impacts in the society. Businesses are subject to change in presence of pandemics and therefore measures should be put in place to mitigate such effects. This can be done not only to save the economy but the society as a whole, and reduce the significant changes in how businesses and consumers conduct themselves.
Alekseev, Georgij, et al. The effects of COVID-19 on Us small businesses: Evidence from owners, managers, and employees. No. w27833. National Bureau of Economic Research, 2020.
Donthu, Naveen, and Anders Gustafsson. “Effects of COVID-19 on business and research.” (2020): 284-289.
Veselovská, Lenka. “Supply chain disruptions in the context of early stages of the global COVID-19 outbreak.” Problems and Perspectives in Management 18.2 (2020): 490-500.