Challenges and Government Support for UK SMEs during Covid-19

This report discusses the challenges faced by UK SMEs due to Covid-19 and the initiatives taken by the UK government to support them. It covers the internal and external factors affecting SMEs, the role of regulations and collaboration, and various schemes launched by the government.

Circular flow of income

Table of Content.
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Challenges which affects the internal factors of UK SME's .......................................................1
Analyzing the duty of the UK government in encouraging the SMEs at the time of the Covid-
19..................................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Circular flow of income is the flow plan which symbolise the money transformation
internally in populations. It is also known as the income model where one studies that how the
capital reciprocate from manufacturer to the employs as the compensation or earning for their
work and it redirect back to the manufacturer when customer buy the product from the outlet.
UK economy was majorly influenced by the massive pandemic Covid-19. This also impacted the
gross working of the employs (Calabrese, Cowlingand Liu 2022). This reports include the
various inner or extrinsic factor of market trading which can effect the businesses commercial or
technical approach in both positive an negative manner. Inner factors that encompass the
business growth are employs motivation or energy, cultural beliefs of the organisation and
command or regulations in the organisation. Exterior factors which affects the organisation
basically includes the social changes in society, environmental or weather alterations, and many
more. These are the factors which organization need to analyse regularly to alter the associated
risk and to aid the company profits. This report encompass on the various on small and medium
governing office present in UK. This report describes about the different state of affairs which
effect the SME and the initiatives UK government took to help SME's (Benkraiem and et. al.,
2021).
MAIN BODY
Challenges which affects the internal factors of UK SME's
Covid pandemic is characterised as the exclusive lapse for almost every organisation as it
is responsible for bring the gross company revenue to downfall. This also brought the major
downfall in country's GDP as their was decline in importation and exportation of goods and
services were seen. The major impact of Covid were seen in all the divisions which includes
hospitality, tourism, fashion, skin and many more. This has also impacted the resources as their
were lots of goods or products that was unused by the consumers and they meet up their
termination period. This is seen because the health authorities have regulated to leg of the
business operations others than the one which are the come under the essential commodities for
living (Cormacain, 2020).
Since the needs and supply decrease which embark on decrease utility of money and
labour work. This impactful law has brought the consequence in company's brand share or
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image. Their were numerous organization which has seen a sudden downfall in their organization
due to the closure of market. Many issues faced by the organization during the pandemic and one
which seen majorly is the Unemployment. Unemployment has took a rapid boom during Covid
as their were solid organization which weren't able to perform their work force in any manner.
This unemployment has lead to the great depression in between the population which has also
increase the sign of crime as the unemployed professionals faced the biasses, relationship
disruption, divisions (Lefley, 2019). This also includes huge pressure that employers face for the
safety and health conditions of their family members and closed ones. This has also influenced
the young generation towards using the unethical approach to deal which includes suicidal
attempts and many more. When analysed the reports it has been determined that there was a
alteration of GDP by nearly the downfall to 35%. this has been seen that the hospitality sector
has seen the huge failure of around 660,000 jobs in around 2020. When reports were evaluated it
has been found that on just about 22% from total working population of UK has witnessed the
unemployment during the Covid. Among them there were around 73% population which belong
to the agriculture or farming background, 10% from the construction background and the
remaining were from the food industry (Hite and McDonald, 2020).
The major work where SME's of UK framework is that organization doesn't consist of
any professional groups which reduce the inner factors of the organization. There are
accessibility of various technology that revolve around marketplace that work as a strategy for
the organisation to enlarge their profits and it will also help their employs to be more efficient.
The main challenges faced by the the organisation due to the downfall of the IT sector which has
proved to create chaos and instability. This also includes the destruction of work force. Due to
this workers were not able to perform and that has short term their expansion in workplace.
Other than that the SME;s group has also faced the shortfall in their economic possession which
population contains. This has also impacted the the health condition of these unemployed
population family. This decreases the employ growth as they weren't able to perform their
capabilities. It is very essential for the employs to roll up new and new advancement which will
help to built their network more. It is necessary for the employer to perform vital as it will
enhance the overall performance of the organization. These challenges are said to be very awful
for the employers to control.
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Loss of guide in marketplace is responsible for awful arrangements inside the market. If
the enterprises have accommodate with whatever error irrespective of the sector from which it
carried from, there were no workforce or the technology aspect who can help them to assist the
problem they are going through. These error first of all sound to be the minute errors but later it
took as a vast hassle for the organisation that might take huge time to solve. Organisation should
get the control guide, which will help them to cooperate with the errors takes place in the market
place. Through this organisation can supply the powerful outcome to its potential customers.
when not provided that, than this will lead to decline in brand image or the reputation which also
lead to decline the market share globally. This was also impact the pricing of products and
services (McCann and Vorley, 2021).
Major task that SME's has to foremost is to sphere the cooperation of employers. To
avail the targets of organisation inside the marketplace there is a need of significant collaboration
of their employs. It is treated as a most vital and distinguished character for any organisation. To
apply the effectual cooperation in between the employs, it is essential to developed the
significant regulation inside the working place or within the organization premises. This
effective regulation helps the employs to deliver the expected result on time and in effective
manner too (Saeed and Ziaulhaq, 2019). It also assist the organization to improve the employers
productivity and skills as they will be sincere while performing their work. This will also
benefits the customer and the client as effective regulation will be the evidence that the produce
product or service will meet the minimal standards for certain. The organisation also go through
a lot of hustle and disturbance which is a lot of discussion matter inside the workplace. So the
significant regulations inside the organisation stand as a powerful stigma for all the individual
working inside the organisation. While making the regulations, it is very much necessary for
them to take decisions in the right manner as if the change in regulation or any alteration is
profile leaked earlier than expected. This act may lead to withhold or decrement the growth of
the organisation as might be the action impasse the negativity in the workplace (O'Donnell and
Begg, 2020).
The role of UK authority here is to lesser the extent of this unattainable act. While doing
it, organisation can take over the growth within the country. The law where the SME's has
worked a lot to influence their organization inside the marketplace is the General information
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safety Law. This law significantly controls the the safety of the customers and also the customer
data guard (Prashantham and Bhattacharyya, 2020).
Analyzing the duty of the UK government in encouraging the SMEs at the time of the Covid-19
The governing body is the supreme repudiated governing of UK whose role is to strong
the financial method of organization to be the strong enough inside the market place. This also
assist the power of company as it supports their workforce to work in a proper and efficient
manner. There are a lot of issues or disturbance which is seen inside the organisation. These
hustles embark brought the delay the function of SME's in compelling mode. These changes
have also effected the covid pandemic on a wide manner. Also during covid the vast scheme was
developed for increasing the awareness about the company. These schemes was very essential
for the company to remote their gain back their market share or a brand value back in the
market. These also help them to advance their quality and also exceeds their promotion and
selling skills which will enhance the organization to re-back their effectiveness (Oki and et. al.,
2021).
There was a complete hype in the cases seen which made the UK government to impose
more and more regulations which encompass the societal stretch or distancing, essential
commodities individuals were only allowed to travel, and many other restrictions were seen.
Government has supported the SME's group through ply them the sick leaves or by providing
small project which they can execute it from home. This can assist them to earn a amount which
can meet their family health and food demands. They also develop the significant schemes to
support the emotionally or physically enervated individuals (Paudel, 2021). These services were
provided to the SME's of UK through the NHS association which is a public service that run
through the benevolent trust. UK government has also incorporated the British Business Bank
scheme which was the loan plan of action initiated to support the minor or major business
organizations. The scheme was launched around the July 2020 with the aim to provide the
employs the minimum salary assistance from their organization. There were a lot of scheme
launched other than that which includes Tax cost referrals, Furlough strategy, self-consulting
scheme and many more. This also consist of covid worker retention scheme which is the PAYE
scheme for Lakoff in organisation and the Cooperate financing facility provided to the SME's
group (Orchard, Ribiere, and Achtzehn, 2018). Another scheme that government brought in was
Eat out help out scheme, was started in around 2020. Aim for the act is provide funds to
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restaurant from Monday to Wednesday. It accomplish reduce of tax with 50% for foods and
alcohols. Job retention Scheme was also the addition to it, where the employs who get affected
due to covid gets proper management support. These all schemes were provided by the
government to support the small or medium business groups.
CONCLUSION
From the above essay report, the inner elements of the UK SME's grouped is dive in
which includes employs motivation, culture or beliefs. This also includes the organisation
regulations and many more. Also discussed about the different challenges that are faced by
SME's groups due to the various internal factors. To tackle the hustle or disturbing situation
which was arrived due to the covid, government has took the rapid action which assisted the
populations of UK. They have launched certain schemes to support the employers and the
business bodies. Also it covers about different support provided by government to the vulnerable
population or SME's groups for the health and safety measures.
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REFERENCES
Books and Journals:
Benkraiem, R., Bouattour, M., Galariotis, E. and Miloudi, A., 2021. Do investors in SMEs herd?
Evidence from French and UK equity markets. Small Business Economics, 56(4),
pp.1619-1637.
Calabrese, R., Cowling, M. and Liu, W., 2022. Understanding the dynamics of UK Covid‐19
SME financing. British Journal of Management, 33(2), pp.657-677.
Cormacain, R., 2020. Keeping covid-19 emergency legislation socially distant from ordinary
legislation: principles for the structure of emergency legislation. The Theory and
Practice of Legislation, 8(3), pp.245-265.
Hite, L.M. and McDonald, K.S., 2020. Careers after COVID-19: Challenges and
changes. Human Resource Development International, 23(4), pp.427-437.
Lefley, F., 2019. Research into the postaudit of capital projects in UK SME organizations. The
Engineering Economist, 64(1), pp.68-95.
McCann, P. and Vorley, T. eds., 2021. Productivity and the Pandemic: Challenges and Insights
from Covid-19. Edward Elgar Publishing.
O'Donnell, G. and Begg, H., 2020. Far from Well: The UK since COVID‐19, and Learning to
Follow the Science (s). Fiscal Studies, 41(4), pp.761-804.
Oki, O., Shah, S., Scrivens, L. and Guckian, J., 2021. COVID‐19: challenges and solutions for
the future of UK dermatology undergraduate curriculum delivery. Clinical and
Experimental Dermatology, 46(1), pp.171-173.
Orchard, S., Ribiere, V. and Achtzehn, D., 2018. The influence of the leader and led relationship
on the intrapreneurship environment in UK SMEs. Academy of Entrepreneurship
Journal, 24(3), pp.1-19.
Paudel, P., 2021. Online education: Benefits, challenges and strategies during and after COVID-
19 in higher education. International Journal on Studies in Education, 3(2), pp.70-85.
Prashantham, S. and Bhattacharyya, S., 2020. MNE–SME co-innovation in peripheral
regions. Journal of International Business Policy, 3(2), pp.134-153.
Saeed, A. and Ziaulhaq, H.M., 2019. The impact of CEO characteristics on the
internationalization of SMEs: Evidence from the UK. Canadian Journal of
Administrative Sciences/Revue Canadienne des Sciences de l'Administration, 36(3),
pp.322-335.
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