Young business owners find new strategies to deal with the pandemic, survey reveals
TC survey shows how COVID-19 is forcing enterprises run by young people in developing countries to think on their feet
The COVID-19 pandemic has left firms owned by young people in developing countries looking for new ways to survive and grow, a new survey by ITC reveals.
Answering the question ‘How has COVID-19 affected your business?’ survey respondents said they had seen a drop in sales − more than any other single consequence at 60% of responses.
The second most-cited effect was ‘temporary shutdowns’ for over 50% of respondents, while the and third-most cited effect was ‘employee absences’ (just under 50%).
‘Running a business during COVID is very challenging in general,’ Masresha Beniam, the founder of Ethiopian company OmniTech, which works in schools to increase technology awareness.
‘But the most challenging part was ensuring that staff were getting paid monthly, even when we were not able to work due to school closures,’ she said.
ITC’s Youth and Trade Programme quizzed small business owners aged 35 or younger to understand how they are responding to the economic and social shockwaves of the global coronavirus pandemic, which began in early 2020.
The three most-represented sectors in the sample were agriculture, informational technology and agri-processing. Retail and wholesale businesses, and travel and transport companies, were also represented.
Temporarily reducing employment for all or some employees was the most-cited coping strategy identified by the survey’s respondents. Pivoting to remote working, increasing communications and marketing activity and developing online sales channels were the next three strategies identified.
‘The strategy we adopted in response was going online,’ Ms. Beniam said. ‘We are now in the process of delivering our classes online.’
André Serge Mousseni, CEO and founder of Etablissement PSM, which produces and markets pepper from Ndikiniméki in Cameroon, said that transport restrictions and quarantine measures made it hard to get the fertilizer he needed for his crops. Other COVID-19 measures also hit Mr. Mousseni’s business.
‘Social distancing requirements and absenteeism are increasing costs and reducing production capacity,’ he said. ‘Our workers are assigned tasks in smaller groups, and some shift work has been introduced.’
Mr. Mousseni said that these restrictions were imposed even as demand for his pepper was rising.
Young business owners in the survey said that the most helpful support they have received during the pandemic was access to finance (26%), access to training (20%), market information (18%) and information about government support programmes (12%).
Answering to the question ‘Which organizations have been of most help during the current situation?’, nearly 40% of respondents answered ‘none’ − more than any other answer. Just under 30% said that business incubators/accelerators had been of most help.
Around two-thirds of respondents did not envisage closing their businesses as a result of pandemic effects. Nevertheless, the remaining third of business owners in the survey said there remained a risk that their business would close in the short term due to the crisis.
The survey was conducted from April to June 2020 with 353 business owners, 30% of whom were women, and with most business owners employing between one and 19 people.
Source : ITC News