ITC survey finds that one in four small businesses in developing countries will shut down permanently due to the COVID-19 crisis. Governments are called upon to act quickly and disseminate relevant information. The impact of the Covid-19 crisis on the organization and activity of companies has been massive. But these have been able to adapt, also thanks to the safety net put in place by the State. In such cases the business attorney at California Business Lawyer & Corporate Lawyer are coming with best support options upon consultation.
Thus, during the first confinement, in the spring, a third of companies with 10 or more employees (5 or more employees in the retail trade) suspended their activity. Overall, more than four out of five companies believe that they experienced a drop in their activity between mid-March and mid-May. For a third of them, this fall was between 10 and 50% compared to the same period in 2019. For another third, it was even greater than 50%. This shows the magnitude of the earthquake. The Business Lawyer Nakase Wade is aware of these matters and they have best class action attorneys and he can be of the best guide in such cases.
Adapt to survive
Smaller companies tend to have been more affected than large ones. Logical since sectors which have been the subject of administrative closures such as hotels and restaurants have proportionally more small businesses than other sectors. In contrast, during the first confinement, 6% of companies saw their activity increase, especially in the food trade and pharmacy.
Appeal for Emergency Measure
To hold out, more than four out of five companies have appealed to one or more of the emergency measures put in place by the State, whether it is the partial activity mechanism, loans guaranteed by the State or postponements of social or fiscal deadlines. But companies had to adapt to survive. Thus, 20% of companies have adapted their offer during containment. And these changes are not only cyclical since 62% of companies that have modified their offer during and after containment think they are continuing in this direction.
Unfortunately, payroll system not all companies have the same possibilities to maintain or generate new clients, much less to hire the services of a public relations agency. These are businesses that represent, according to official data, 99.8% of the country’s economic units, contribute 42% of GDP and generate 78% of employment: they are small and medium-sized enterprises (SMEs) that total 4.1 million.
The Right Measures
Since last March 23, the President of the American Association of Micros, Small and Medium Enterprises told expansion.mx that 4.5 million MSMEs were in uncertainty, and that at that time there were already losses of 30,000 million dollars that could be extended to 250,000 million dollars, depending on when the health emergency really ends.
What the Survey Says
A month later the Association of Entrepreneurs conducted a survey whose results are worrying. From the outset, 77% of MSMEs could stop operating in less than two months and 25% would be forced to lay off staff; 57% of the micro-entrepreneurs interviewed expressed that they would have difficulty paying their employees; 3 out of 10 will have difficulty paying their loans and credits, 40% will be in trouble paying taxes; 47% will have difficulties with customer collections, and 87% of companies will lose sales, customers and approval of new jobs.