SBA head warns of likely layoffs and business closures

by Marlon Madden

More layoffs and business closures are on the horizon as a result of the national lockdown measures brought on by the dreaded COVID-19 pandemic, Chief Executive Officer of the Small Business Association (SBA) Senator Dr Lynette Holder has warned.

She said it was therefore a matter of urgency for government and businesses to come up with more innovative ways of operating during and after the pandemic, warning that “lockdowns can no longer be the answer if the small business sector, and by extension the economy, is to survive”.

In addition, Holder said the current environment called for new health and safety measures in the form of legislation so as to ensure the safety of those who are unable to work remotely.

“Curbside pickups and delivery services should also become the standard approach for businesses across the board.

“This must be the way forward, as the chances of the world returning to a pre-COVID work and shopping environment in the near future are slim, and any further lockdowns could spell the complete demise for the small business sector,” said Holder.

In her end of month February outlook, the SBA leader pointed out that while most small businesses where still recovering from a deleterious impact from the first national lockdown last year, there was no doubt that the effects of the most recent lockdown “felt like a kick to the head” of the small business sector while already down.

In fact, Holder said this was proven in a recent “exploratory survey” conducted by the SBA, which showed that 62 per cent of participants said they had seen “a significant decline in the performance of their business since the last lockdown in April 2020”.

“With the second lockdown further compounding this issue, 76 per cent of respondents believed that they would be unable to satisfy their operational costs in the next three months due to a loss in revenue caused by the prolonged closure of their businesses,” she said.

She opted not to say what sample size was used, but stated that “such a significant loss would also have other ripple effects mentioned by participants including increased staff lay-offs and in some cases, a total closure of the business”.

She said it was clear that even with vaccines available, the COVID-19 virus would be around for “a long time and potentially will become a normal part of human life, similar to the common cold and flu”.

“If this is the case, it is my firm belief that the country, the region and indeed the world, should be seeking to find innovative ways to stay functional in the months to come. We must develop new business models and operational strategies which seek to revolutionise and completely digitalise the way we work and do business so that livelihoods can be saved,” Holder warned.

She also called for improvement in business facilitation, saying this will be critical for firms to function as they emerge from the national lockdown, which was implemented in February.

Holder said while she welcomed the Government support for micro and small firms “much more must be done in the provision of government services”.

“Timely payment of Value Added Tax (VAT) refunds, the ability of firms to register and pay for government services online, costly clearance of goods from ports of entry, and access to market intelligence and certification for exported goods, are some of the areas to be improved upon to facilitate growth going forward,” recommended Holder.

She said: “Those state agencies involved in standards and certification, export development and the provision of licences for a range of business operations, must be transformed to a more entrepreneurial culture to work with the private sector to enable the competitiveness of firms to develop and be sustainable. After all, it is not Government that trades, but it does influence the environment where trade happens”.

Senator Holder said despite the hardships being faced by business owners, she believed that if given the proper tools to rebuild they would become the driving force “to pull the economy out of the current crisis”.

Adding that the intrinsic characteristics of small business owners were adaptability and innovation, Holder said the sector could be relied on to create jobs, earn and/or save foreign exchange and contribute positively to social development, and should therefore be protected. marlonmadden@barbadostoday.bb