Unfortunately, the fallout of the unprecedented COVID-19 pandemic has caused businesses around the world, big and small, to suffer.
COVID-19 has led to a surge in unemployment, wage cuts, and remote working opportunities. All of these factors have devastated not only the health of individuals around the world, but also the global economy. Businesses have been extremely hard hit. Small businesses across the globe are feeling the financial fallout as millions of people choose to stay inside and shop for their needs online, instead of patronizing local businesses. Even Europe has remained closed for business since March, barring Sweden, the only country that did not enforce a nation-wide lockdown. According to Marcus DeBaise, the unprecedented measure of an extensive lockdown seemed like the only option for most countries to prevent the pandemic from becoming unmanageable.
Unfortunately, the fallout of the unprecedented COVID-19 pandemic has caused businesses around the world, big and small, to suffer. Here are some scenarios that describe the ways companies are adapting to restrictions due to the pandemic.
The case of a family-run hotel in Spain as described by Marcus DeBaise
Hotel Corisco is a 24-room hotel along the Spanish Mediterranean Coast that was gearing up for the high summer season when it was suddenly forced to close its doors due to the lockdown. Their immediate reaction was to cancel their reservations, which became crucial to protect the employees, staff, and the hotel owner’s family members who stayed there. The next step was stopping the hiring of new employees. Finally, the hotel had to lay off three employees to reduce the monthly expenses. This experience was typical of many in the region and beyond.
Even after these actions were taken, the hotel owner is surviving on the €40,000 loan with a 1.5% interest offered by the state-owned bank. It is part of the government-backed lending of €100 billion included in the financial stimulus package. The loan is payable back within next year, but it will continue to help pay for the fixed liabilities like the paycheck of the previous month, electricity, water and gas bills, and supplier’s payments. Meanwhile, the hotel owner has maintained marketing efforts by posting photos of the Mediterranean on social media for future clients.
The story of a Publicity Agency in the Netherlands
Terry Groenen is a 25-year owner of a flourishing publicity agency in the Netherlands. Groenen was devastated when the government banned gatherings of more than three people; it meant the end of photoshoots in the agency. Moreover, the sudden slump in the economy meant companies would tighten their purses and be reluctant to spend on marketing. Although the Netherlands is less affected than Spain and Italy by the coronavirus pandemic, it is unclear when the country will return to business-as-usual.
Groenen plans to seek government aid for the self-employed, which will supplement her income. She keeps herself busy with administrative tasks, but is still worried about the uncertainty surrounding the future of her home-grown business.
A medical equipment manufacturer in Germany has a different story to tell
Medical equipment manufacturers are under stress of a different kind. They struggle to meet the sky-high demand for ventilators necessary in the treatment of COVID-19 patients. The German company EBM-Papst supplies fans for these ventilators. The manufacturer’s capacity of 100,000 fans a year has been surpassed with requests exceeding 1.5 million. The company is struggling to meet the astronomical demand as it faces challenges to expand the assembly line and maintain sourcing amid the disruptions in the supply chain.
While the demand for ventilators keeps one of the company’s divisions afloat, its other units are idle. This has made it hard to keep those that do not work on the production of ventilators employed. The company is subsidizing the salaries of other employees through funding from the state government.
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