Covid-19 : weakened, the Small and Medium companies fear for their survival but hold the challenge

Since March 2020, the global health crisis has changed the situation of many small and medium-sized companies, causing severe cash flow problems and increasing the need for support. The Swiss

In Switzerland, we can see that SMEs are resilient, and that’s a good thing.

An established economic crisis…

1/4 of the Swiss VSEs and SMEs were closed from January to May 2020, in some countries this can be up to half.
1/3 of the VSEs and SMEs had to reduce their workforce, postpone their credit deadlines and make concessions on their business expenses.
2/3 of business leaders said that their sales have fallen compared to the same period last year.

… which particularly affects certain areas of activity.

Very small businesses, usually run by one or two people, have closed more quickly than other businesses.
The restaurant, tourism and hotel sector has fallen dramatically. The COVID-19 caused a drop in turnover of 57%, 54% and 47% respectively.
Business owners are facing uncertainties.

With the lifting of the restrictions, many companies have been able to resume their activities and have started to recover slowly. But the recovery remains complicated and faces challenges:

The majority of VSEs and SMEs had to respond when it came to reassuring customers despite a very shaky cash flow and a weakened workforce. These companies have put all the means on their side to keep this relationship with customers. Over time, many challenges have been added. The crisis has caused a drop in demand, which has fallen by as much as 50% depending on the sector. Sanitary protocols are difficult to respect in some areas.

In addition, there is the digital challenge. Nearly 30% of SMEs have had to develop an entire digital part following the health crisis. There is a correlation between the use of new technologies and the growth of companies. This is good news, because the digitalization of companies plays a decisive role in the competitiveness and productivity of our economy, it becomes a necessity. This allows for a more fluid interaction with customers as well.

Today, the coronavirus crisis confirms the inevitability and urgency of the digital transformation of companies. The use of digital technology has been essential to maintain commerce, but also the interactions between companies and their employees, or those between brands and consumers. However the crisis is not without impact and has left some gaps for VSEs and SMEs.

Sources:

• https://dataforgood.fb.com/global-state-of-smb-fr/
• https://www.chefdentreprise.com/Thematique/actualites-1056/Infographies/transformation-numerique-face-crise-economique-353285.htm