Challenges Faced by Small Business Owners Amidst COVID-19

    The Coronavirus pandemic has hit the Indian economy hard but there are some sectors that have taken the biggest blow. The nationwide lockdown had adverse effects on businesses as cash flow was adversely affected. Due to this, many small shops and businesses had to shut down operations. Many are still struggling to stay afloat. 

    From zero profits to no external funding, the challenges faced by the small Indian business are many.  While the government has offered some relief with new policies, it will take a long time for things to go back to normal and even more for the small businesses to revive. 

    What are the major challenges faced by small business owners due to Covid? Let’s take a look.

    Limited scope for digitalization

    On one hand, where some entrepreneurs saw the pandemic as an opportunity to expand their business online, there were others who were left completely helpless. Not every business has the potential to go digital, for eg. physical stores simply don’t have that option. Even if they were to somehow think about taking their business online, it would be a time consuming and expensive process. 

    Cash flow crunch

    One of the biggest impacts of coronavirus has been reduced disposable income for individuals and erratic cash flows for businesses. Because many small businesses have lost customers due to the pandemic, profits have reduced drastically. As a result, small business owners simply don’t have enough money in the bank to pay employees, vendors, etc. Companies that had taken out small business loans are in an even tougher position. 

    Difficulty in paying loans

    Another challenge that small business owners are facing is with respect to loan repayment. This is even more problematic for those that took out financing at high business loan interest rates. With almost no profit coming, simple sustenance has become difficult in itself. Many business owners have been struggling to pay EMIs, especially those with limited savings. While a business loan EMI calculator can help in determining the amount of EMI that has to be paid every month, for many it has been extremely difficult to do so.

    Permanent shut down

    As some businesses continue to sustain themselves on savings and cost-cutting, others haven’t had that option. Several businesses have had to shut down permanently due to the losses they incurred since the beginning of the pandemic. Many shop owners have struggled in paying rent and hence, had to shut them down. The retail industry particularly has suffered a huge economic setback all over the world due to the Covid-19 pandemic.

    Personal responsibilities

    Since most people have had to work from home, small business owners have had to juggle both personal and professional responsibilities in a day. Especially in cases where business owners are the sole breadwinners, taking care of children and the elderly has proved even harder. For those with business loan and other financial obligations, the pandemic has proved to be the toughest.


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