Pandemic tests small business mettle
Against the backdrop of widespread socio-economic disturbance wrought by the raging COVID-19 pandemic, small enterprises stand out as a most vulnerable sector.
Typically cash strapped and undermanned, they may be ill-prepared to withstand the tsunami of market and operational aberrations resulting from COVID-19 containment measures: Customers restricted from shopping for all but the most essential goods and services; workers sensibly staying or working from home; supply chains paralyzed or broken; malls and other retail establishments shut down; to mention a few.
Befuddled, owners and managers are caught flat-footed, with no precedents to get guidance from.
With no sales to draw revenues from, they are hard pressed to keep up with rental, payroll and mortgage commitments.
Facebook, at the onset of the crisis, took note of the vulnerability of the sector and came out with a $100-million grants program for small businesses most affected by the crisis.
In a similar move, the US Small Business Administration also opened its Economic Injury Disaster Loan program to help small players tide over the temporary setbacks.
In the Philippines, the government has announced a wage subsidy measure for people working in small companies.
Holding a more optimistic view of small businesses’ ability to ride out the crisis is Melchor Morandarte, vice president of the Small Enterprises Research and Development Foundation (Serdef) and owner of Sir Mong’s Food Products. He believes that the resilience of small businesses will pull them through. They are close to their markets and thus are better able to connect with them in a lockdown, in spite of restrictions.
“Finance-wise, we do not have as much loan exposure as bigger firms do. Thus, it will be easier for us to bounce back when all these blow over,” he says.
He, however, qualifies that small and medium enterprises (SMEs) need government interventions in their recovery effort.
Rory Rebustes, coowner of Citrus Snap Photography, is an example of a small entrepreneur hit hard by the crisis but has managed to stay above water. “All shoots are on hold; receivables collection is frozen. And there’s no telling when all this will be over.”
However, she avoids stressing out by addressing the immediate concerns, like how to help employees cope. “Fortunately, we are a small team. And so far we have managed to pay our workers their salary from our modest stash. We have also tried to contribute to the effort to help front-liners and the community at large.”
Another coping mechanism for Rebustes is learning new skills while in lockdown. Skills like digital marketing and new approaches to the photography business. She hopes new know-how will help them bounce back faster.
Summer Reyes Cerullo, president of VRC Creative Events Management Group, thinks that events management is among the sectors hardest hit by the pandemic. “Since mass gatherings are banned, we had to postpone or cancel events calendared for April.”
The business is paralyzed, she laments. “ What we are offering is not a basic need. Weddings can wait; anniversary celebrations can be canceled. Right now, we just have to keep our website and social media accounts active so people will know we are still here.”
VRC maintains links with suppliers and associates. Lifting each other up is the way for SMEs to go, she maintains. “We have resumed promoting product—not as much as to encourage soon-to-wed couples and others to book with us as to help them gather ideas and direction for when the crisis is over. We continue to market”
The company has adopted the Department of Labor and Employment’s (Dole) proposed measures.
Employees have been paid in full for March and have received half of their 13th month pay, in compliance with Dole rules.
Here is the accumulated wish list of the three entrepreneur respondents in terms of interventions and accommodations: Space rental freeze for the months they do not operate; penalty waiver for late loan payments; lower interest rates; deferred taxation; and cash grants for the retail, hospitality and leisure businesses. —CONTRIBUTED
For more stories on small entrepreneurs, please visit the Serdef website at www.serdef.org.
