While vaccination programs across the world have been relentless with their implementation and efforts to reopen the global economy also continue to be pursued, we are still a far cry from overcoming the impact of the Covid-19 global pandemic. And although we have managed to soar past pre-pandemic levels of economic activity and made waves of improvement compared to early 2020, we are still a long way away from regaining full composure and economic stability.
Furthermore, the sector taking the brunt of the said impact is all the small businesses and optimistic startups forced to adapt to the new normal and navigate through the looming uncertainty and volatility that’s overshadowing the market. And, as a result thereof, confidence in global economic recovery and sustainable growth is waning because the circumstances appear dire and more nuanced than at face value.
Constantly Accounting For “What-If” Scenarios
Firstly, one of the most apparent reasons behind the odds being stacked against small businesses and startups is the emerging principle of accounting for all “what-if” scenarios that may happen during today’s global pandemic. Yes, the concept of conservatism and being prudent with business decisions is nothing new, but the scale and sheer magnitude that it’s occurring at today have no precedent.
- Numerous Potential Threats And Limited Resources: Number one, numerous potential threats are seemingly popping up at every corner we turn, with the latest Delta and Lambda variants now pushing for stricter health protocols and guidelines, counteracting all the progress we’ve made so far. And if current supply chain restrictions and economic slowdowns weren’t enough already, we also need to account that small businesses don’t have unlimited capital and resources to answer for every risk.
- Crunch To Adapt And Innovate Tech Infrastructure: Number two, despite the vast digital migration of businesses being seen as a net positive for the global economy in the long term, we also can’t deny that the crunch to adapt and innovate places a heavy burden on small businesses without the technical expertise to migrate in the first place. And while we’d normally recommend implementing artificial intelligence, big data analytics, and efficient energy monitoring solutions, small businesses don’t have the financial strongarm to enact any of these changes immediately.
- Stress Of Maintaining Current Sales Performance: Number three, although it may seem like many firms and businesses are managing to maintain a healthy bullish trend these past few months, there are inherent stressors to keeping current sales performance this way. And while many would like to believe that the world has received more than enough time to recuperate all that was lost beforehand, in reality, we might already be losing steam and are due for a major market correction for the rest of 2021.
Prevailing Market Conditions Offer Zero Reassurance
Secondly, another factor behind the uphill battle small businesses and enterprises face today is the prevailing market conditions that offer zero reassurance, indicating that a bleak and worrisome economic outlook is fast approaching. And unless a major economic event were to prove the fears otherwise, the worries of retail investors and financial analysts face the risk of being realized in the coming months.
- Declining Core Retail Sales: Just last week, US Core Retail Sales reported a worse than expected decline, falling to -0.4% and indicating that overall consumer activity is showing bearish signs. And if this bearish trend continues onto next month’s report, we can expect sales performances of all manners of business to sharply decline in proportion, with only well-established industry leaders having the capacity to withstand any economic turbulence.
- Fears Of A Stock Market Crash Worsen: From a technical standpoint, we have yet to experience any proper pullback onto support levels after the pandemic-induced economic recession. With indicators seemingly peaking and showing signs of a slowdown, fears of a stock market crash also worsen. Of course, some would argue that the correction might not be as deep given the bullish rally indicating sustainability. Still, we must also understand that steep crashes are but part of the investing cycle as well.
- Consumer Confidence Falls Off: Last but not least, consumer confidence has been falling off as of recent due to inflation and the erratic housing market, and although the move down is not as impactful as the two previously mentioned indicators, falling consumer confidence is still telling of current consumer activity. If the downward trend continues and people choose to save instead of stimulating the economy, this will undermine any bullish rally that the market is trying to sustain.
Flexibility And Adaptability Are Key To Survival And Success
In conclusion, if any small business or startup plans to survive and stay on the path toward success, flexibility and adaptability are vital features they must possess amid the new normal. And even though luck will also help in how the future plays out, we can only hope for the best and do what we can with the available resources.