How Small Indian Businesses Are Impacted Due To Covid-19


The coronavirus pandemic has disrupted regular economic activity across the world, leading to expectations of a historic economic decline in 2020, according to Standard Chartered. Covid-19 effects on small businesses, in particular, are going to be tough: supply chain disruptions, a fall in consumer demand and tremendous strain on the banking and financial sectors are just a few of the challenges.

MSMEs have often been described as the backbone of India’s economy. So how does the coronavirus impact on small businesses play out? Here’s a closer look.


Often, the smaller the company, the harder the hit. This is because companies with less than 20 employees tend to have leaner cash flows and working capital. Due to the lockdown, hours are reduced (in sectors like manufacturing), and in other industries, projects are stalled. In sectors like logistics and hospitality, business comes to a grinding halt. With margins already slim in the restaurant business, cash flow becomes a big problem. But liquidity isn’t limited to just hospitality – it’s a matter of concern for all small businesses and MSMEs.


Supply Chain

While there has been an easing of restrictions in certain areas, but some borders remain sealed, and the movement of goods is still prohibited. With an unpredictable supply chain, businesses are bearing the brunt. From raw materials for manufacturing (sourced largely from China) to agricultural supplies not making it to the wholesalers and retailers, there has been a severe disruption in the supply chain.

Supply chain

Slowing Of Demand

Everyone’s jobs and salaries have taken a beating. Layoffs abound in sectors across the board, from media to manufacturing. Hundreds of companies have announced salary cuts for their employees. When the economic climate is this bleak and spending power is considerably reduced, a slowing of demand is only natural – which leads to lower sales and profits.

As A Consumer, Be Vocal For Local

As a consumer, now more than ever, it’s time to be #vocalforlocal and support small businesses. Instead of ordering groceries off Amazon, call up your nearest kirana dukan and buy your basics from them. Your local merchant has more money to work with, and you help keep their business afloat.

For Businesses, It’s Time To Adapt & Pivot

Businesses have to adapt and pivot to stay afloat. Food delivery services Swiggy and Zomato have added new services to their platform in the form of grocery delivery and courier services to cater to consumers who cannot venture out to buy provisions.

Similarly, shopkeepers and merchants need to make their business available to consumers through digital platforms – it is the need of the hour.

best business app for local merchants

Paytrac can help you make the switch from the manual merchant to digital dukandar – all you have to do is install the app. Manage your orders online with the order management feature that allows you to capture shopping lists and orders from WhatsApp. You can then edit and process the orders and send receipts to your customers.

Paytrac also keeps track of payments from multiple channels, including QR, PoS, wallets, and bank transfers. You even receive audio notifications each time an amount is credited to your account, ensuring you don’t miss a single payment. So what are you waiting for? Install Paytrac today and take your business online.

Leave a Reply

Your email address will not be published. Required fields are marked *