Investigating the Response of Small and Medium Sized Enterprises to COVID19 Disruption Implications for the United Kingdom UK

This study investigates the impact of Covid-19 on small and medium-sized enterprises within the UK. It analyses the present business decision-making that SMEs are undertaking to face challenges arise due to COVID-19 in the UK and the policies and interventions made by the government to support SME’s in dealing with the situation of COVID-19.

To investigate the response of small and
medium sized enterprises to COVID19
disruption implications for the United
Kingdom UK
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Table of Contents
Chapter 1- Introduction...................................................................................................................4
Background of the company and research..................................................................................4
Research Aim..............................................................................................................................4
Research Objectives....................................................................................................................4
Research Questions.....................................................................................................................4
Research Rationale......................................................................................................................5
Summary of the project (each chapter).......................................................................................5
Chapter 2- Literature review: Impact of Covid 19 on SME in the UK...........................................7
Introduction of the chapter..........................................................................................................7
Literature of the topic..................................................................................................................7
Literature gap..............................................................................................................................7
Chapter 3- Research Methodology .................................................................................................8
Research Methodology...............................................................................................................8
Introduction to chapter................................................................................................................8
Introduction.................................................................................................................................8
Research onion ...........................................................................................................................8
Research Philosophy...................................................................................................................8
Research Approach ....................................................................................................................9
Research strategy........................................................................................................................9
Data collection............................................................................................................................9
Data analysis...............................................................................................................................9
Ethical considerations.................................................................................................................9
Chapter 4: Research and Findings.................................................................................................10
Introduction...............................................................................................................................10
Data analysis.............................................................................................................................10
Discussions...............................................................................................................................15
Chapter 6- Conclusion and Recommendations .............................................................................16
Conclusion................................................................................................................................16
Recommendations.....................................................................................................................16
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References.....................................................................................................................................18
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Chapter 1- Introduction
Background of the company and research
Small and medium size enterprises are the lifeline of the UK economy and make an
effective outlook in more than 60 countries. The pandemic impact may cause for the loss of life
and severe human suffering impact. The SME industry faced higher level of impact on UK
economy which are related to transmission channel, financial market, suppliers and revenue.
These factors are associated to the company and gain higher level of efficiency to work
significantly and produced different strategies to overcome the challenge in different perspective
(Aidoo and et.al., 2021). This research include the investigation report on Covid-19 and its
impact of SMEs. Also it will present a case study on UK based industries that further helps in
managing the impact and find opportunities while overcoming the challenges.
Research Aim
“To analyse the impact of Covid-19 on UK SME’s”. A study on Rowlinson Knitwear
Research Objectives
 To identify the impact of COVID-19 on small and medium enterprises within UK.
 To analyse present business decision-making that SMEs are undertaking to face
challenges arise due to COVID-19 in UK.
 To determine the opportunities that SMEs have to face challenges arise due to COVID-
19 in UK
 To recommend policies and interventions made by the government to support SME’s in
dealing with situation of COVID-19.
Research Questions
 What is the impact of COVID-19 on small and medium enterprises within UK?
 What is the present business decision-making that SMEs are undertaking to face
challenges arise due to COVID-19 in UK?
 What are the opportunities that SMEs have to face challenges arise due to COVID-19 in
UK?
 What are the policies and interventions made by the government to support SME’s in
dealing with situation of COVID-19?
4

Research Rationale
One of the main reason to conduct this study is to analyse the impact of Covid-19 on UK
SME’s. In addition to this, the present research allow researcher to gain knowledge about issues
faced by small and medium enterprises during COVID-10 and the interventions developed by
government to support in such situation. Moreover, it will also help investigator in both personal
as well as professional context. In relation to professional, it gain understanding about
opportunities that SMEs have to face challenges arise due to COVID-19 in UK. In context to
personal, it help to learn and improve skills such as data analysis, data collection, time
management, communication and many more. Furthermore, it will aid research worker to
conduct further studies effectively and garb opportunities as well.
Summary of the project (each chapter)
Chapter 1: Introduction: It is the first part of research which consist of important
information about study that is research aim and objectives, research question, reason behind
conducting the study and so on. The main objective of this chapter is to successfully develop
aims & objectives as the overall study is based on it.
Chapter 2: Literature review: It is the second chapter which consist of secondary
information from various sources that is books, articles, magazines and so on. The main
objective of literature review is to identify gaps from previous studies which further assist to
fulfil research questions.
Chapter 3: Research methodology: It is one of the important chapter which mainly involves
the process, tools as well as techniques used by researcher to collect data on particular topic. In
addition to this, it also consist of research approach, philosophy, design ethics etc (Ayed and et.
al., 2019). The main objective of this chapter is to gather information from various methods and
attain valid results on time.
Chapter 4: Research and findings: This chapter is associated with secondary information
which is collected for literature review. The main purpose of research and findings chapter is to
discuss the overall results and findings of secondary information in a systematic and effective
manner.
Chapter 5: Conclusion and Recommendations: It is the last and significant chapter of study
as it include data of research briefly which assist reader in finding out the outputs & aim of study
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is attained or not. In addition to this, it also consist of recommendations about how SMES deal
with the situation of COVID-19.
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Chapter 2- Literature review: Impact of Covid 19 on SME in the UK
Introduction of the chapter
In this chapter, it will be explored and presented different aspects and concepts about the
impact of Covid-19 on the SME within international business platform. This will be beneficial
for managing business decision making process and make theories such as different impact of
Covid-19 on SME, challenges faced by SME's in UK (Barnes and et.al., 2021). Furthermore the
future opportunities and government interventions that are provide a significant support to the
businesses. This section help the reader to enhance knowledge related to Covid-19 pandemic and
its impact on SME's.
Literature of the topic
What is the impact of COVID-19 on small and medium enterprises within UK?
According Sharma (2021), the outbreak of the COVID 19 has directly lead to impacting
the performance and profitability of the small business around the UK (UK small and medium-
size enterprises: Impact of the COVID-19 crisis, 2021). The small and medium size business are
considered to be the major contributor in the growth and development of the economy, they are
nearly account for 50% of total revenue generated by the UK businesses. But the effect covid 19
has directly impacted the performance of the SME, around 80% of the SME has stated that there
is immense fall in the revenue of the organisation. The employability rate of the SME has also
been impacted drastically. Large number of employees lost their jobs in the sector due to the
situation prevailing around the globe. In addition to this, there was also huge impact on the
demand and supply leading to impact the operational activities of the organisation. Large number
of organisation were forced to shut down their operation due to continuously facing loss. This all
lead to creating huge impact on the profitability and performance of the business effectively.
What is the present business decision-making that SMEs are undertaking to face challenges
arise due to COVID-19 in UK?
As per the view point of Katie clift (2020), the drastic outbreak of the Covid 19 has
directly impacted the lives, communities and business organisation, the performance operations
of the business has been directly impacted. But with the changing environment it is essential for
the business organisation to take corrective measures and overcome the situation.(How Does
COVID-19 Affect Challenges Facing Entrepreneurs?, 2021) It becomes essential to take right
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decisions to survive in the marketplace. In order to effectively deal with the present situation,
large number of SME are taking big steps to deal with the situation such as organisation are
moving towards the use of growing online technology more. Strict safety measures are being
taken into consideration by the organisation. In addition to this various challenges that
organisation faced includes finding customers, funds to start new business, funds to grow the
business, skilled employees, network and connection and so on. The organisation are effectively
dealing with these issues through implementing new technologies and changing their strategies
as per the situation. The use of social media allowing the organisation deal with the problem of
finding customers, as use of social media makes it easy for the organisation to directly interact
and connect with the potential customers. Number of entrepreneurs
What are the opportunities that SMEs have to face challenges arise due to COVID-19 in UK?
As per the view point of Hanard (2021), the outbreal of the covid 19 has also lead to
offering number of opportunities for the small and medium size business around the globe
(Entrepreneurship and Covid-19: Challenges and opportunities, 2021). Right direction and path
as well as proper evaluation of those opportunities will help the entrepreneurs to be successful
and continue to grow in the marketplace and enhance their overall performance effectively. The
entrepreneurs are expecting their business to grow and be larger than the pre pandemic. Around
72.5 % of entrepreneurs are nearly expecting to enhance their employees size. In addition to this
the business are also seeking opportunities to acceleration of their existing business mainly
moving towrads the growing sector of online service. Online business is considered to be one of
the most growing business with large number of customers moving towards it. There is also
opportunities of saving cost in terms of increasing remote working, it help small business to save
their many cost. Many organisation also seek opportunities in terms of shift in the customers
behaviour due to the pandemic. All the growing opportunities will help the entrepreneurs to
enhance their performance and grow in the marketplace effectively.
What are the policies and interventions made by the government to support SME’s in dealing
with situation of COVID-19?
As per the view point of Court (2021), there are number of policies and interventions
were made by the government in order to support the small and medium business effectively and
promoting them to work effectively. The government supported large number of small business
through offering them financial support during the covid 19. government also offered the wages
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for many workers in case of organisation was unable to pay off to their workers
(Entrepreneurship and Covid-19: Challenges and opportunities, 2021). The government also
made policies in term of safety and security procedure needed to be followed in order to
smoothly carry their work. The effectively financial support is offered to the small and medium
business as they can smoothly carry their activity and survive in the market.
Literature gap
It is analysed while conducting literature review process for addressing the issue and
make sure to achieve direct and indirect impact on the company. Furthermore, it is determined
that the challenges which the SME's in UK mostly faced due to different factors of Covid-19
such as Lock-down, decline in sales, demotivated staff and etc. In addition to this the gap is
gaining knowledge related to different policies which are adopted by the company and provided
by government (Durst, Acuache and Bruns, 2021).
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Chapter 3- Research Methodology
Research Methodology
It is defined as the important and systematic procedure of analysing gathered information
in order to interpret it into meaningful and effective manner. In addition to this, it is the specific
process that is used to identify, choose, analyse and interpret data about a topic.
Introduction to chapter
It is one of the significant chapter of a study as it include all the data collection process,
techniques and tools used by researcher to conduct the research along with the justification. In
addition to this, the present study is based on secondary information and to analyse such
information, literature review has been used.
Introduction
Research methods is one of the important part of study as it help researcher to develop a
valid and reliable conclusion in a timely manner. In addition to this, it introduces as a systematic
investigation that includes defining research problem, formulation research question, gathering
& analysing information and so on (De Hertogh, 2018). For the present study, qualitative study
is conducted and the main reason to select is it help researcher to gather and evaluate secondary
information in an appropriate and accurate manner.
Research onion
It is a framework that was developed by Saunders and is described the stages by which an
investigator go through in order to develop an effective methodology. The framework includes
various layers and is given below:
Research Philosophy
There are mainly two forms of research philosophies that is interpretivism and positivism
but as per the research topic, Interpretivism philosophy is suitable as it help in gathering as well
as evaluating secondary information without any difficulty. In addition to this, interpretivism
philosophy is focuses on secondary information that help researcher in attaining valid &
appropriate results in an effective manner.
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Research Approach
The two types of research approaches are inductive and deductive approach and to carry
out this investigation, inductive research approach is appropriate and useful as it follow research
questions with purpose to enhance scope of study.
Research strategy
There are different forms of research strategies that is interview, experimental, case study,
action research, literature review and many more (Flick, 2020). In the present study, literature
review has been applied as it help in gathering secondary data about the impact of COVID-19 on
UK SMEs.
Data collection
There are mainly two forms of data collection method that is primary and secondary
method and the present study is completely based on secondary data. In order to collect
secondary data, various sources is taken into consideration that is books, articles, journals and so
on (Lê and et. al., 2019). This help researcher to gather actual information on research topic
which leads to development of valid and reliable conclusion.
Data analysis
It is defined as the process by which collected data is analysed by the researcher and it is
mainly of two forms that is frequency distribution analysis and thematic analysis. In the present
study, thematic analysis is used as it help in analysing and presenting secondary information in
an appropriate and effective way.
Ethical considerations
It is significant for researcher to consider all the ethical principles so that all the activities
associated to the study is execute without any interruptions and delay. The various ethical
principles are anonymity, confidentiality, informed consent and so on (Mukherjee, 2019).
Following of all this principles assist researcher to attain objectives within set time frame.
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Chapter 4: Research and Findings
Introduction
In this chapter the data will be able to present the findings and make sure to complete
entire project that are linked with appropriate methods. This is basically a secondary research
analysis that helps in providing data and manage qualitative data that will be able to defined the
key themes and make thematic analysis (McKay, Bastian and Lindberg, 2021). This further
include that presented and discuss the Covid-19 and its impact on SME industries in UK based.
Data analysis
Theme1: Impact of Covid-19 on SME
Most of the SME's accountable for 50% of the revenue generated by UK businesses and
mainly 44% are counter for the labour forces. With the outbreak of Covid-19 pandemic crises the
economy and individual crises affect majorly. Below graph is related to UK based SME that face
a major impact on their revenue.
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Illustration 1: UK small and medium-size enterprises: Impact of the COVID-19 crisis,
2021

Interpretation
From the above graph, it is analysed that in August, May and November the number of
SME's that have high or low impact on their revenue. The figure shown that an improvement on
different business which are similar to each other. In August and May of 2020, 57% and 60%
respondents said that they would be work out of businesses in 12 months. Whereas, in the line
with major improving trends, revenue reported by UK and SME to achieve respondents which
were stronger at the time of November 2020. Furthermore, in addition to this it is analysed that
in May 2020, almost 80% of the respondents said that their revenues are fallen as because of the
negative impact of Covid-19 in UK. Moreover, the figuring amount had been dropped to analyse
65% by November 2020, although there are some factors which are distant make worse other
than different revenue process. Although 90% of Small, Medium enterprises in managing
accommodation whereas reduction in revenue in November 2020 (Sachs and et.al., 2021).
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Theme 2: Challenges faced by SME's due to Covid-19 in UK
Interpretation:
The SME's are basically having large amount of challenges which affect their sales and
revenue in different formats. From the above table it is analysed that arising funds for starting
business is one of the top challenge for SME's. Before pandemic it was 64% whereas now it
increased to 80%. Another share of entrepreneurs with the impact of business challenges 64%
before pandemic and now it increased to 72% during the pandemic. Another challenge is related
to self doubt and fear was reported as a challenges are arises by 58% of entrepreneurs during the
lock-down. It was 50% before the lock-down, so it is further become the challenge for the SME's
to motivate themselves during lock-down process. Approximately, half of entrepreneurs a new
businesses for appoint skilled employees during the pandemic 52% which are compared to 39%
before pandemic. In addition to this when it comes to locations, region and make geography was
reported as a challenge for most of the SME's. From 17% to 39% the change happened during
the pre and post pandemic stages. In last the proportion which are reported for inclusion is based
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Illustration 2: How Does COVID-19 Affect Challenges Facing Entrepreneurs?, 2020

on race, ethnicity and income factors which become the challenge rose from 17% to 28% from
2019 to 2021.
Theme 3: opportunities arises while facing challenges due to Covid-19
Interpretation:
From the above graph, it is interpret that the more than half of entrepreneurs saw some
positive impact or opportunities of Covid-19 pandemic on their businesses. The very first
impact is business acceleration, and it is analysed approx 82% of the entrepreneurs said they
have high positive impact on the business acceleration growth. Whereas, 49% said they have
higher business efficiency and 19% respondents said that they find long term opportunities in
their SME's.
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Illustration 3: Positive long term impact, 2021

Theme 4: Different policies and interventions made by government
Interpretation:
From the above graph, it is interpret that government provide a support to major SME's
that are related in London and Non-London. In London 40% SME said government guaranteed
low interest rate whereas, outside London 29%. furthermore, some of them are said that
government grant cash more in outside London that is 28% vs. 19% is in London based SMEs.
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Illustration 4: Government supplied applied for SME, 2021

Discussions
Research question 1: What is the impact of COVID-19 on small and medium enterprises
within UK?
From the above literature review, it is analysed that most of the UK based companies are
facing positive and negative impact on the SME. This is analysed that it become threatened to
generate private sectors and employees for managing all public and private sector organisation.
Many of the entrepreneurs are seen that this pandemic make positive and negative impact on the
organisations and growth of the company. Many of the companies face real challenges to sustain
their business.
Research question 2: What is the present business decision-making that SMEs are
undertaking to face challenges arise due to COVID-19 in UK?
This research discussed different factors which are related to decision-making process in
SMEs which are mainly used to face challenges that arise in Covid-19 in UK. Some of the major
challenges are related to finding valuable customers, funds to start for business growth, skilled
employees and provide them training. In addition to this, social support, time to devote in
businesses are the major challenges which SMEs faced in UK sectors.
Research question 3: What are the opportunities that SMEs have to face challenges arise due
to COVID-19 in UK?
The research further indicate that building insights it analysed that different trends for the
Post-Covid economy and on targeted support measures to help UK SMEs thrive. They analysed
different opportunities which are associated to business acceleration, opportunities, efficiency
and refocus on the growth of the company in UK market. This will help them to gain higher
level of competitive advantages.
Research question 4: What are the policies and interventions made by the government to
support SME’s in dealing with situation of COVID-19?
From the above secondary data, it is analysed that UK government adopt major policies
and interventions programmes to make growth in SME and support them to fight with Covid-19.
Some of them are related to government guaranteed low interest loans, cash based grants,
deferral of income tax and other major benefits which are taken by SMEs of UK. These are
associated to support the companies and make a future long term path in addressing the
challenge and make effective growth in overcome the challenges.
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Chapter 6- Conclusion and Recommendations
Conclusion
From the above discussion, it has been concluded that COVID-19 has adversely impact on
the overall purpose and functioning of an organisation. In addition to this, it is analysed that
there are various strategies that is adopted by small businesses to deal with the situation of
COVID-19 that is development of search engine, using of digital platforms, online payments,
digital marketing and manty more. All this help SMEs to recover their losses easily and to
maintain its performance by raising its customer base level that take place through digital
platforms. Moreover, it is determined that there are many initiatives taken up such as extend
timeframes for payments of custom duties & fees, enable paperless trade, invest in digital
infrastructure, change policies and so on. All this initiatives and policies help company in
dealing with situation of COVID-19 and to execute activities in a proper manner. Furthermore, it
is analysed that using secondary information assist researcher to gain in-depth knowledge about
research topic and gain valid and reliable outcome in an effective manner. In the last, it is
determined that using of an effective research method is vital for the study as it help in attaining
objectives within stipulated time period.
Recommendations
 It is recommended to use the digital payment that can be effective and promote to deal
with customer more effectively. This is the way that can allow customer to stay safe from
getting risk of COVID virus and allow to perform the operation with better effect.
Through using the digital payment, individual can get able to transfer their payment
online without any difficulty. This can help to effectively and easily process the payment
within less few seconds. Digital payment also helps in promoting the easy payment and
enhance the customer purchasing behaviour. Due to this, customer like to purchase more
and help to get better business to small and medium enterprises.
 It is also recommended to use mask and promote customer to use mask that can enable to
apply the safety measures at store and workplace. Through apply, this safety concern,
SME’s can get better opportunity to deal with customer without risk of getting infected
through virus. This can be effective and help to promote the small and medium
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enterprises business to earn more and make higher profit without any risk of health
(Skinner and et.al., 2021).
 It is highly recommended that the SMEs should use effective strategies related to major
hygiene factors. As after the Covid-19 impact many of the individuals are more focused
on hygiene and health concision. So the companies should work effectively and manage
high profile growth in sustainable and eco-friendly aspects. These will help the
companies to work effectively and manage the pandemic challenges in UK market.
Through using hygiene factors people can have lower risk of getting infected through
virus and help to perform the purchase easily with better effect. This wil further helps in
addressing the issue and gain higher level of efficiency in SMEs and UK economy.
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Entrepreneurship and Covid-19: Challenges and opportunities, 2021. [Online]. Available
through: <https://www.kcl.ac.uk/business/assets/PDF/research-papers/country-report-
uk-entrepreneurship-and-covid-19-challenges-and-opportunities-an-assessment-of-the-
short-and-long-term-consequences-for-uk-small-businesses.pdf>.
How Does COVID-19 Affect Challenges Facing Entrepreneurs?, 2021. [Online]. Available
through: <https://www.kauffman.org/entrepreneurship/reports/how-covid-19-affects-
challenges-facing-entrepreneurs-by-business-age/>.
UK small and medium-size enterprises: Impact of the COVID-19 crisis, 2021. [Online].
Available through:
<https://www.mckinsey.com/industries/public-and-social-sector/our-insights/uk-small-
and-medium-size-enterprises-impact-of-the-covid-19-crisis>.
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