The global outbreak of COVID-19 has caused profound financial and economical instability in society on multiple levels. Small and medium-sized companies are able to serve a critical role in preventing poverty, unemployment, and food scarcity from exploding at any moment. Small companies are the backbone of every economy, and with the global economic impact of COVID-19, their protection is more crucial than ever. Many independent contractors, freelancers, and small business owners in the UK are struggling. They have not fully recovered from the financial implications of the pandemic and are now dealing with the high cost of living.
In this article, we will discuss the top impacted industries and the post-pandemic financial struggles they face according to a study conducted by Markel Direct.
One of the hardest-hit industries during the pandemic was the hospitality and tourism industry. The industry has suffered significant losses due to travel restrictions, social distancing measures, and other health and safety protocols. Many hotels, resorts, and other businesses have had to close their doors permanently, while others have had to lay off workers or reduce their hours. With travel and tourism expected to remain low for some time, the industry is facing a long road to recovery.
The pandemic has also impacted the retail industry, with many stores forced to close due to social distancing measures and other restrictions. Consumers have shifted to online shopping, which has led to a decline in foot traffic and sales for brick-and-mortar stores. Retailers have had to pivot to online sales and curbside pickup options to stay afloat, but this has not been enough to make up for the losses.
The transportation industry has also been impacted by the pandemic, with many airlines and other companies experiencing significant losses. Travel restrictions and safety concerns have led to a decline in air travel, while other forms of transportation, such as trains and buses, have also seen a drop in ridership. The industry is expected to recover slowly, as travel restrictions and safety concerns continue to impact consumer behavior.
The arts and entertainment industry has also been affected by the pandemic, with many theaters, concert halls, and other venues closing their doors. Musicians, actors, and other performers have lost their livelihoods, and many are struggling to make ends meet. Streaming services and virtual performances have provided some relief, but the industry is still facing significant financial challenges.
Considering the current economic state and financial challenges that businesses face, the issue that most concerned the respondents were growing expenses. The rising expense associated with operating a business was the top concern among freelancers and SME owners. Others explicitly mentioned the rising costs of commodities and supplies as a significant cause of concern. Attracting new clients was their next top issue — naming this as their primary source of stress, followed by keeping existing customers. The margins of profit were an additional source of anxiety for several business owners.
To make up for the rising expenses, business owners reported increasing their daily charges or the cost of their goods in the previous year, while employees reported working additional hours. This creates a difficult quandary for owners of small businesses and freelancers; they confront rising costs, which require price increases but must reconcile this with the effect of obtaining new clients and retaining current clients. Others had lowered the range of their goods, while a small percentage of the population had reduced worker numbers.
In conclusion, the COVID-19 pandemic has caused significant financial strain for businesses around the world. You may have little power over the general economic situation impacting businesses, yet there are a few specific steps you can utilize to strengthen your financial standing. As the world slowly recovers from the pandemic, businesses will need to find new ways to adapt to changing consumer behavior and navigate the post-pandemic landscape. With creativity, innovation, and resilience, businesses can overcome the challenges and emerge stronger from the pandemic.