The Response of Small and Medium Sized Enterprises to COVID-19 Disruption and the Implications for the United Kingdom (UK)

This research aims to investigate the responses of small and medium-sized enterprises (SMEs) during the COVID-19 pandemic in the United Kingdom (UK). It will explore the immediate positive responses adopted by SMEs to recover from the pandemic, the challenges they faced, and the potential opportunities and threats in the external market environment. The research will provide insights into the implications of the pandemic on SMEs and the UK economy.

Business Research
Project

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
Background of Research.........................................................................................................3
Rationale of Research.............................................................................................................4
Research Aim.........................................................................................................................4
Research Objectives...............................................................................................................4
Research Questions................................................................................................................4
LITERATURE REVIEW................................................................................................................6
Immediate positive response of small and medium business adopted in order to recover from
COVID 19 pandemic in the United Kingdom for ensuring business is stable.......................6
Current decision making of small and medium business and determine the main challenges
faced by them in the UK during the COVID 19 pandemic....................................................7
Threats, occur due to external environment of market and also determine the potential
opportunities for SMEss.........................................................................................................7
Research Gap..........................................................................................................................8
RESEARCH METHODOLOGY.....................................................................................................1
Research Philosophy..............................................................................................................1
Research Approach.................................................................................................................1
Research strategy....................................................................................................................1
Research choice......................................................................................................................1
Data collection........................................................................................................................2
Data analysis...........................................................................................................................2
RESEARCH AND FINDINGS.......................................................................................................3
Discussion...............................................................................................................................6
CONCLUSION AND RECOMMENDATIONS............................................................................8
Conclusion..............................................................................................................................8

Recommendations..................................................................................................................8
REFERENCES..............................................................................................................................10

TITLE: The Response of Small and Medium Sized Enterprises to COVID-19 Disruption
and the Implications for the United Kingdom (UK).
INTRODUCTION
Background of Research
The outbreak of the COVID-19 has impacted the national as well as global economies.
Different firms are facing various problems with a certain degree of losses. Companies are
dealing with several issues including decreased demand, supply chain delays, export order
cancellations, raw material shortages, and shipping disruptions. Small and Medium-Sized
Enterprises are the backbone of several economies all over the world that give income as well as
employment generation to a large number of people around the globe (Baker and et. al., 2020).
Small and medium-sized enterprises in the UK had been struggling to thrive due to complex
trading restrictions imposed due to arise the pandemic of COVID-19. The UK economy's main
source is small and medium-sized businesses. They are becoming more concerned about the
country's poor economic prospects.
There are many SME in UK which are playing vital role in improving the economic
growth of the nation which comprises of Davison Canners, Fourex, Imaginera,
LovetheSales.com, Marshfield Bakery, Trusted Housesitters, etc. which are being negatively
impacted and affected by the current situation of Covid-19. In context of Marshfield Bakery and
other SME it has been observed that their supply side is being disturbed by covid-19 as all these
companies experience a reduction in the supply of labour, as workers are unwell and the situation
of the lockdowns and quarantines lead to further and more severe drops in capacity utilisation
(Kasemsap, 2018). Along with this, during the time of covid-19 situation issue of supply chains
interrupted is also faced due to lack of proper transportation services which is leading to shortage
of raw material for these SME’s. Further, it has been also analysed and observed that the
dramatic and sudden loss of demand and revenue for SMEs is also faced within the UK which
severely affects their ability to function, and/or causes severe liquidity shortages for many SME
within UK. The most appropriate and effective ways for SME like LovetheSales.com,
Marshfield Bakery, Trusted Housesitters is to rely and emphasis on the online delivery channels
along with making use of digital technology to attract and cater larger number of customers even
at the time of lockdown to maintain the performance and stability level (Hasse, 2021).

Rationale of Research
The current investigation is related to investigate the responses of small and Medium size
enterprises during the COVID- 19 pandemic in the United Kingdom. Small and medium-sized
organizations are more affected due to the pandemic of COVID-19. The importance of
lockdowns to curb the spread of COVID 19 and how lockdowns impacted SMEs and the
problems that SMEs faced during this pandemic epidemic that spread human to human. This
research is mainly conducted in the personal and professional context. In the personal context,
the understanding of the researcher about the COVID- 19 pandemics can be understood in a
detailed manner (Bartik and et. al., 2020). In the personal context, the researcher can find out the
issues which are faced by the small and medium-size companies from arising the COVID- 19
pandemic situation within the UK. Conducting the present investigation helps in enhancing the
skills and capabilities to conduct a similar kind of the investigation in future.
Research Aim
The aim of this research is “To investigate the responded of small and Medium size
enterprises during the COVID 19 pandemic in the United Kingdom.”
Research Objectives
 To determine the immediate positive response of small and medium business adopted in
order to recover from COVID 19 pandemic in the United Kingdom for ensuring business
is stable.
 To identify the current decision making of small and medium business and determine the
main challenges faced by them in the UK during the COVID 19 pandemic.
 To evaluate the threats, occur due to external environment of market and also determine
the potential opportunities for SMEs. Investigate about the National Schemes as well as
policies investigations for supporting and sustainability of SMEs.
Research Questions
 What are the immediate positive response of small and medium business adopted in order
to recover from COVID 19 pandemic in the United Kingdom for ensuring business is
stable?
 What are the current decision making of small and medium business and determine the
main challenges faced by them in the UK during the COVID 19 pandemic?

 What are the threats occurring due to external environment of market and also determine
the potential opportunities for SMEs? Explain about the National Schemes as well as
policies investigations for supporting and sustainability of SMEs?

LITERATURE REVIEW
Literature review is a form of narrative review. This is research article that summarizes
current understanding on a specific subject including substantive observations and also
theoretical and analytical contributions. Literature review are the secondary sources that do not
focus on current or experimental research. There has been secondary method used to collect
information in literature review that linked with the research objectives. To collect information,
there has been secondary sources consists such as articles, journals, scholars and other sources.
Immediate positive response of small and medium business adopted in order to recover from
COVID 19 pandemic in the United Kingdom for ensuring business is stable
According to viewpoint of Maria Albonico, Zdravko Mladenov and Ruchi Sharma
(2021), The COVID-19 epidemic is global crisis which has placed the small and medium
businesses (SMEs) under massive pressure to thrive, forcing them to adapt quickly and
efficiently to the situation. Small and medium-sized businesses (SMEs) are in a very difficult
situation. They've had to lay off staff due to falling demand and most of them may not have
financial means to live in this environment (How the COVID-19 crisis is affecting UK small and
medium-size enterprises, 2021). Governments also introduced one of several policies aimed at
meeting the demands of small businesses. Overarching focus has been to offer vital funding and
resources to small business owners in the short term. To deal with the situation, SMEs in United
Kingdom have embraced a variety of emerging technologies. Businesses would need to be
trained in workplace health and safety as well as business survival to escape the pandemic. These
programs must be supported through effective government action. The small and medium size
businesses in United Kingdom recovered and hope to use pandemic-era technologies to boost
revenue and create new jobs as the economy improves, but the effects on millions of workers
around the country remains uncertain (Bartik and et. al., 2020). On the other hand, many of the
firms are well placed to support small businesses in obtaining necessary funding, adapting to
current operating styles and then returning to work safely. They are the goods and service
suppliers with the skills and financial stability to assist SMBs in the transformation to digital-first
environment, since they are the core drivers of economy in the "modern standard."

Current decision making of small and medium business and determine the main challenges faced
by them in the UK during the COVID 19 pandemic
Based on Dylan Jones-Evans (2021), The first major challenge is faced by small and
medium-size firms is digitization which trends in the implementation of emerging technology,
with almost half of SMEs prioritizing new digital technologies. In addition to this, they had
changed their technology habits in reaction to the pandemic, with several embracing innovations
they had never used before. Requirement for the new remote working methods and a higher rate
of internet sales has had the greatest effects, with 95 percent of companies reporting increased
use of video conferencing or interactive working platforms and 64 percent increased use of
online social media marketing (The challenges and opportunities facing SMEs, 2021). The
Covid-19 crisis has had a huge effect on R&D and innovation with a third of the SMEs
decreasing R&D and innovation spending in three months leading up to October 2020 with the
further reductions expected in the future (McKibbin and Fernando, 2020). This is unsurprising
that the COVID-19 pandemic has had significant consequences for workplace mental health,
affecting not only employees but organizational success with indicating a link between poor
performance and mental illness. Other than this, COVID-19 has had a major financial impact on
key aspects of the UK innovation environment like higher education institutions. Unless various
parts of the UK adopt their unique strategies for promoting R&D and innovation that take
advantage of each area's or country's strengths, it will have a significant effect on a creativity
recovery. Apart from this, there are several challenges faced by SME’s during covid 19
pandemic situation. For instance - For several SMEs, negative impacts like supply chain
instability and the expense of dealing with COVID-19 constraints posed additional challenges.
Threats, occur due to external environment of market and also determine the potential
opportunities for SMEss
According to Dieter Helm (2021), The strategies put into action to slow the spread of virus
have had serious short-term consequences for economies impacted. Most operations were halted
as a result of the imposition of lockdowns, which had an especially large effect on various
industries. Though some industries have prospered as people stocked up supplies and switched to
online deliveries, overall balance has been strongly negative. Due to extreme lockdowns or
social-distancing requirements immediate situation has been exploited to loosen certain
environmental laws and compliance has been weakened. UK government has launched many

policies for companies to obtain state-backed rescue loans as part of its corporate financing and
help response to Coronavirus Disease 2019 (COVID-19) pandemic. Role of the national and
local governments in assisting and promoting SMEs is critical (Liu, Yue and Tchounwou, 2020).
Initiatives such as UK Trade & Investment and Government's Business Growth Service have had
a strong impact and should be extended further. Pandemics and unidentified notifiable
illnesses including such COVID-19 are unlikely to be covered by any commercial insurance
plans. Businesses with insurance policies that include government-ordered closure or
pandemics or government-ordered closure and an unidentified notifiable disorder should be
entitled to file a claim (The Environmental Impacts of the Coronavirus, 2021).
Research Gap
on the basis of above literature review and discussion, many research gap are identified and
analysed which gap about the positive response of small and medium business adopted in order
to recover from COVID 19 pandemic in the United Kingdom for ensuring business is stable has
been found which require additional primary research. Apart from this, gap and lack of
information about the challenge is faced by small and medium-size firms is digitization which
trends in the implementation of emerging technology, with almost half of SMEs prioritizing new
digital technologies is also found out with current literature review. A lack of information about
the main threats, occur due to external environment of market and also determine the potential
opportunities for SMEs within UK is also find out along with provision lead out by the UK
Trade & Investment and Government's Business Growth Service to mitigate the issues created by
covid-19.

RESEARCH METHODOLOGY
Research methodology is defined as the instrument, techniques or methods used by a
researcher to gather authentic and reliable information about the research subject. In order to
gather accurate information or data relevant to the subject, the researchers used a range of
methodologies. In this, research onion has been considered as it was developed by the Saunders
et. al. (2007). This gives progression by which research methodology can be effectively designed
(Nicola and et. al., 2020). Various layers included in research onion given below:
Research Philosophy
This is defined as a set of beliefs or philosophies followed by a researcher in order to
collect reliable data on a specific research subject. Interpretivism and positivism are two different
types of research philosophies. In this analysis, the investigator is using positivism because it
allows them to properly analyse theoretical knowledge. It has been used aid them in properly
analysing secondary data so that they can effectively achieve their desired outcome (Beraha and
Đuričin, 2020).
Research Approach
It is a procedure that researchers follow in order to better perform their research. This is
important for a researcher to choose the most suitable research method for their research in order
to perform work correctly and efficiently. Deductive and inductive analysis approaches are the
two primary types of research approaches that an investigator may use. In this research project,
researcher has been used deductive approach because it aids in proper and efficient evaluation of
secondary data.
Research strategy
This is technique used through a researcher to gather knowledge or evidence on a specific
research subject. In terms of this researcher's assessment of current information, there has been
systematic literature review strategy considered as it assists them in collecting more reliable and
accurate knowledge for project (Brown, Rocha and Cowling, 2020).
Research choice
This is defined as type of data on which the investigator wants to focus their study. The
study's result is strongly dependent on the investigator's research decision, so it's important for
them to choose the most suitable one for their needs (Guo and et. al., 2020). For researchers,
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there are two kinds of methods to choose from qualitative and quantitative. In this study, the
researcher has been used a qualitative approach, wherein they collect theoretical data that does
not usually require numerical calculations. It information is often gleaned from existing
documents.
Data collection
This is defined as a method or technique by which an investigator gathers information or
data about a subject, goal or objective. There are two different types of data collection methods
such as primary and secondary method. The researcher is using a secondary data collection
method for this research study. In this, Researchers gather information or data from a variety of
sources, including online and offline books, journals, records and more (Craven and et. al.,
2020).
Data analysis
For analysis of collected data that is in form of qualitative information, use of the
thematic form of analysis has been made. Use of the thematic analysis is appropriate and
justifiable for current study which is a method of analyzing qualitative data that is usually
applied to a set of texts, such as interview transcripts along with ensuring better implication and
analysis of the secondary information. Under the use of the thematic analysis the researcher are
closely to the examines the data to identify common themes based on the topics, ideas and
patterns of meaning that come up repeatedly which supports better analysis and implication of
the collected data.
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RESEARCH AND FINDINGS
THEME 1: Immediate positive response of small and medium business adopted in order to
recover from COVID 19 pandemic in the United Kingdom for ensuring business is stable
From mention information, this has been examined that Although reducing costs
is crucial but short-term solution to crisis, emerging processes and technology have risen to top
of the priority list for 2020, where they can help with productivity gains, the growth of new
business models and market entry. For higher percentage of respondents, the launch of new
goods and services has become more relevant.
Figure 1:Changing priorities as a result of the Covid-19 pandemic
It has been stated from the mention figure that relative shifty in significance of tactics
through businesses as consequence of COVID-19. Around three quarters of the businesses are
aiming to minimize cost as it has most necessary in light of pandemic because of pressure this
has brought on the cash flow management and also slightly for small and medium size
businesses which has been also supported by the information provided by the Liu, W., Yue, X.
G. and Tchounwou, P. B., 2020.
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THEME 2: Current decision making of small and medium business and determine the
main challenges faced by them in the UK during the COVID 19 pandemic
From the above mention information, it has been analysed that there are some challenges
faced by the UK SME during pandemic situation of COVID-19. Given the pandemic's impact on
face-to-face business experiences, this is no wonder that half of companies with website to offer
products or services have increased their use of it in reaction to COVID-19. Due to the extreme
essence of the shift in the customer interest, it expanded usage is seen across industries, though it
is marginally more prevalent among smaller firms. While, as per the information provided by
Kasemsap, K., 2018 also supported the use of internet marketing and social media is low in the
industrial sector, manufacturing companies are more likely to use it to reach consumers in the
wake of pandemic. On the other hand, the main influence on activity is reported to be the
immediate negative consequences of pandemic including a drop in the demand and need to delay
business operations. For several SMEs, negative impacts like supply chain instability and the
expense of dealing with COVID-19 constraints posed additional challenges.
Figure 2: Business reflections on Covid-19 impact percentage of businesses
This figure summarises that views and grouping response into concerns are centred
primarily around direct positive or negative impact on businesses, external challenges have been
arisen and also concerned regarding future viability of the businesses. 28 % of the responses, was
direct negative concerns on business activity from COVID- 19 pandemic.
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THEME 3: Threats, occur due to external environment of market and also determine the
potential opportunities for SMEs
It has been analysed that The United Kingdom government took policy, giving
companies access to three separate lending programs operated by private banks and backed by
government guarantees.80 percent (Coronavirus Business Interruption Loan Scheme and
Coronavirus Large Business Interruption Loan Scheme) or 100 percent (Coronavirus Large
Business Interruption Loan Scheme) (Bounce Back loan scheme). UK tax authority (HMRC)
will refund up to £2,500 a month of furloughed employees' pay, plus associated Employer's
National Insurance premiums and mandatory automatic enrolment employer pension
contributions. Businesses may opt to "top up" a furloughed employee's salary to 100% of their
contracted pay, but they are not required to do so under scheme. UK government continues to
help by offering lower loans by programs established last year. Cash subsidies, tax cuts, and tax
deferrals are also available from UK and delegated governments. In regards to this, it has been
analysed that from first day of the absence, the UK government starts to provide a refund to
small and medium-sized businesses for up to 14 days of COVID -related sick leave per employee
which has been also supported with the information provided by the Hamilton, L. and Webster,
P., 2018. This covers times that a person is absent from work due to self-isolation, even though
they are not ill. For qualified employees, this may be worth up to £188.50 per affected employee.
Businesses impacted by restrictions have received cash funds from the UK and devolved
governments. Businesses required to close in England can apply for funding of up to £3,000 a
month, whereas businesses that are already open but face limits can apply for up to £2,100.
Businesses forced to close in England have been entitled to demand a one-off grant of up to
£9000 million since lockdown was announced in January.
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Figure 3: The share of UK small and medium size enterprises reporting decreased revenue
because of COVID-19 crisis dropped from previous months
From the above mention figure, it has been stated that SME respondents in UK were
stronger in November 2020. In May 2020, 80% of the respondents stated that revenues had
reduced due to the COVID-19 crisis that information also tend to be supported with the view
point of Beraha, I. and Đuričin, S., 2020.
Discussion
On the basis of currents study, a discussion can be made out that the issue of covid-19
was worrying prospect within the entire UK not just for small and medium size businesses but it
is also creating and leading negative and affected the wider economy that has been also
supported by the information provided by the Beraha, I. and Đuričin, S., 2020. Along with this, it
has been also find out and analysed that the SME businesses tend to account for 50% of total
revenue generated by United Kingdom business along with contributing to the 44% of labour
force which is reflecting its importance in UK. Beside this, as per the information provided by
Brown, R., Rocha, A. and Cowling, M., 2020, An study about the immediate responses of the
small and medium-sized businesses in order to recover from the covid-19 pandemic situation in
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United Kingdom for assuring to stable the business is also made which consist of coming up with
online and digital mode of operations. It has been also analysed that in order to overcome from
the issues, government of United Kingdom introduced many policies regarding improvement in
the small and medium-sized business in United Kingdom. Further, as per the information
povuded by McKibbin, W. and Fernando, R., 2020 an examined of the challenges which are
faced by the small and medium businesses in covid-19 pandemic situation is also made and
discussed in currents study. further, it has been also supported by currents study that SME in UK
may opt to "top up" a furloughed employee's salary to 100% of their contracted pay to effectively
mitigate and overcome the issue of covid-19 along with taking the continuing help of as UK
government continues to help by offering lower loans by programs together with Cash subsidies,
tax cuts, and tax deferrals.
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CONCLUSION AND RECOMMENDATIONS
Conclusion
From the above mentioned report, it has been concluded that covid-19 pandemic situation
developed and negative impact on the small and medium sized businesses in UK. The aim of
present investigation is to investigate the responded of small and Medium size enterprises during
the COVID 19 pandemic in the United Kingdom. The covid-19 was worrying prospect not just
for small and medium size businesses but for wider economy as these businesses account for
50% of total revenue generated by United Kingdom business and 44% of labour force. In this
present investigation, information in literature review has been collected by using the secondary
sources such as books, articles, journals, scholars and some other sources. In the literature review
studied about the immediate responses of the small and medium-sized businesses in order to
recover from the covid-19 pandemic situation in United Kingdom for assuring to stable the
business. To overcome from the issues, government of United Kingdom introduced many
policies regarding improvement in the small and medium-sized business in United Kingdom.
There has been examined the challenges which are faced by the small and medium businesses in
covid-19 pandemic situation. There has been determined about national schemes and policies of
United Kingdom government to support the SMEs. Research methodology has been conducted
by consisting the research onion framework. There has been considered the interpretivism
research philosophy because it is helpful in analysing the secondary data and providing the in-
depth understanding. To collect the information, there has been systematic literature review
considered because it is helpful in analysing the viewpoints and opinions of authors related to
particular subject area. In analysing the data, there has been information collected from the client
sources end mention the graphs.
Recommendations
From the given information, it has been recommended that the pandemic's economic effect
on small businesses varies widely, owing in part to pace at which the government responds to
virus's dissemination. As a result, policymakers must consider and evaluate the consequences of
the legislative measures they plan to use. Policymakers must be certain the weak SMEs do not
fall between the cracks of the support system. They must understand the potential effects of
COVID-19 on small companies as the epidemic progresses, as well as the problems that will
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remain after pandemic is managed and rehabilitation continues before devising a recovery plan.
People should be used to using videoconferencing platforms both effectively and socially so
increased usage of videoconferencing to facilitate greater homeworking during pandemic would
reflect the fact.
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