The outbreak of COVID has already had a huge impact on businesses across the globe. Both small and large businesses have been negatively affected by government-imposed COVID restrictions. The United States, for example, has experienced a $10.7 billion plunge in GDP after the outbreak of the virus. That has also caused businesses to become more concerned with public safety and to pay more attention to biosecurity and pandemic preparedness.
You must know what these unintended consequences of COVID mean for your business now that the world is in a state of panic mode. This is the perfect time to get ahead of the curve and take action now! First of all, you should know about the programs implemented by the government to help businesses affected by COVID restrictions. Employee Retention Credit or ERC is one such government program that encourages employers to retain their employees on the payroll. You can check out whether you qualify for ERC by consulting ERC specialists like Sunrise Business Solutions.
Let us now see how COVID restrictions have affected business.
Lower demand for products and services
With COVID infection rates continually rising, consumers have cut back their spending. That results in lower demand for products and services. In addition, as governments are imposing COVID restrictions in a bid to limit the spread of the virus, they usually also impose a ban on mass transit and public gatherings. Such restrictive measures are likely to lower consumer confidence which will in turn lead to reducing consumption of goods and services.
Increased safety regulations
Governments are taking a lot of measures to ensure public health and safety. Some governments have shut down schools and universities while others are imposing travel restrictions. These restrictive measures make it difficult for consumers to enjoy the pleasures of life like traveling, visiting theme parks, and going on vacation out of town. That’s bad news for businesses that rely on these activities for their income.
Scarcity of raw materials
COVID also makes it difficult for businesses to access raw materials. The production of raw materials like wool, cotton, and copper is being hampered by the outbreak of COVID. In addition, the closure of airports and ports has also made it difficult for businesses to import raw materials from overseas markets.
Several firms have been badly affected by COVID restrictions. Their supply chains have been disrupted by the exclusion of countries or the suspension of transport activities. Some businesses have even been forced to reduce or shut down production because of supply disruption.