Don't be a Bystander: How to Save Small Businesses in Europe
The pandemic pushed thousands of small businesses to the edge of closing. Here is what you can do.
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Since the beginning of the pandemic, small businesses all over Europe have found it difficult to stay afloat. The months of lockdown, confinement, and continuing social distancing hit the most vulnerable people the hardest. For too many entrepreneurs, the plan of breaking even and making their business strong and prosperous this year became jeopardized.
Think of a hairdresser who invested all the money he had and a bank loan into his new hair salon in Rome a few months before Italy was quarantined. His hope was to start recovering losses by summer 2020. But he had to close the salon until June. Do you think he still stands a chance of rehabilitating his business? And how many stories like that are out there today?
There are more than 25 million small- and medium-size enterprises in Europe, employing around 100 million people, and accounting for more than half of Europe's GDP. The European Commission calls them the backbone of the EU economy. Entrepreneurs are doing a lot for the communities where they are based, especially in rural areas. At the same time, the International Labour Organization singles out small businesses as one of the biggest groups impacted by the pandemic.
But it is not just about the region-level significance, there is something else more important here. Behind every small business, there is a story. A personal story of following your dreams, of continuing the family profession, of moving to a new country with no support network, of being let go of the job and still trying to make it on your own, of doing something on a small scale that would be useful for your neighbourhood, of introducing back the simple and sustainable practices. A personal story of care and passion for your family, your community and the world.
So we as a society cannot let small businesses simply disappear. The United Nations report states "the COVID-19 pandemic is a vivid reminder of the need for global cooperation and solidarity. We must strengthen and combine our efforts to leave no one behind."
We have to support the small businesses of Europe in their struggle for survival. But to know how we can do it, we need to look at the three key problems that they have right now.
It has never been easy for small-business owners to find time for developing a proper marketing startegy or creating an online image. They already had too much on their plate running their everyday operations. With the lockdown, many businesses were forced to close which simply stopped the customer flow altogether. Taxi drivers, hairdressers, personal gym trainers, cafes focusing on beverages, small construction companies and many others could not migrate online. Even now with the lockdown lifted, the fear of high contact remains and past clients choose to keep their distance until further notice.
But all this time the small businesses have no choice but to drain their scarce resources. They have to pay employees who were maybe hired just before the lockdown in anticipation of the summer season. With people getting ill, there might be a sick leave to cover. The suppliers who already delivered the stock are waiting for payment independently whether it gets sold or not. Small business owners have to pay rent of the workspace and utilities even if the business is temporarily closed. Even if the business can move online, for example, many restaurants turned into food delivery, they still have to invest in setting it up.
While they could not sell anything, the pressure on small businesses has been incredible. Many tried to apply for government subsidies. But to apply for them you need to know that they are available and be able to fill in the right documents in the right way. According to the EU Spring 2020 Economic Forecast, small-business and self-employed professionals tend to receive less support from government schemes and are overrepresented in the sectors hardest-hit by the confinement.
Adapting business model to changing circumstances.
This one presents a challenge not just for small businesses but also for big companies that can afford full teams of consultants. It requires business knowledge and previous specialized education that in many cases entrepreneurs don't have. For some, the best strategy would be to collaborate with complimenting businesses, clients and even competitors. But the business culture differs from one community to another, and sometimes collaboration is not considered an option.
The key thing missing to enable entrepreneurs to overcome the crisis of pandemic is access to real-time information. The information on what their peers are doing and what strategies can be employed, how to reach and market to potential customers during and after the quarantine, what funds are available and how to access them, how to maintain the cash flow while the stores are closed.
Given the limited resources of most small businesses, the only way to get this real-time information is from their fellow entrepreneurs. But what if they don't have the network? It's very common, especially among newly formed businesses, to start out completely alone. Or what if they don't want to show their weakness and ask for advice?
So what can we do to save those small businesses?
Providing access to knowledge.
To help small businesses of different countries learn from each other, we launched a non-profit social initiative Lockdown Economy. We collect and share short video-stories from entrepreneurs around the world to see how the pandemic impacted their business and what they are doing to save it. We started out in English but now we are creating local editions where people can speak their own language and find out the insights from their own towns and regions.
This initiative gives entrepreneurs a forum to speak, provides a source of inspiration and connection to a wider community of small business owners. They share inventive ideas on how to adapt and reinvent themselves, and most importantly on how to overcome the crisis of pandemic. We went one step further and connected a few of the small businesses we interviewed with the MBA students of the Anahuac Mayab University so that they can address the business challenges together and learn from each other. We hope to roll this out in many other universities (reach out to me if you want to cooperate).
If you are a small-business owner yourself, I encourage you to share your video-story of how you are dealing with the pandemic on social media with the hashtag #lockdowneconomy_local. We will do our best to promote it!
How can YOU help small businesses in Europe.
It is simpler than you think. Each of us holds the power to make a difference. To start with, you can purchase products and services from the local small businesses. Don't forget the power of recommendation, help the ones you like by sharing them with your network in person and on social media. If you have time you can volunteer your help as well. For example, you can offer to build their online presence, to search for available funding opportunities or something else that fits your own skills.
And if you want to take a more active role in this noble mission, you can join our team of volunteers on the initiative Lockdown Economy! You can help us to spread the word, create partnerships or become an ambassador of this movement in your town. You can help us bring entrepreneurs across the globe closer together in building the new better world based on inclusion, equity and sustainability.