A Business Research Project on SME Responses to Covid in the UK

This business research project assesses the responses of small and medium enterprises (SMEs) in the UK to the disruptions caused by the Covid-19 pandemic. It identifies immediate responses for recovery, evaluates business decision-making in the face of major challenges, and assesses the potential opportunities and threats posed by the external environment and national schemes. The research employs a qualitative approach, utilizing an inductive method and interpretivism philosophy to analyze data and derive findings. Key themes explored include positive immediate responses like collaboration and downsizing, major challenges such as financial constraints and infrastructure limitations, and the effectiveness of national schemes in supporting SME recovery. The project concludes with recommendations for SMEs and policymakers to navigate the ongoing impact of Covid-19.

BUSINESS RESEARCH
PROJECT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background of the study..............................................................................................................1
Research aims and objectives......................................................................................................1
Significance..................................................................................................................................1
Rationale......................................................................................................................................2
Chapters summary.......................................................................................................................2
LITERATURE REVIEW................................................................................................................2
Theme 1: Positive immediate responses for the SME's to recover from Covid-19 in UK and
ensure the stability of the business...............................................................................................2
Theme 2: Major challenges faced by the SME's in UK and the decision-making undertaken in
response of the same....................................................................................................................3
Theme 3: Opportunities and threats for SME's in the market environment and the effectiveness
of the National schemes and the policy interventions.................................................................4
RESEARCH METHODOLOGY.....................................................................................................4
Research type...............................................................................................................................4
Research approach.......................................................................................................................5
Research philosophy....................................................................................................................5
Data collection.............................................................................................................................5
Data analysis................................................................................................................................6
Reliability and validity.................................................................................................................6
Research limitations.....................................................................................................................6
Ethical considerations..................................................................................................................6
RESEARCH AND FINDINGS.......................................................................................................7
Theme 1: SME policy responses to recover from the Covid-19 situation in UK in order to
maintain the stability of the business...........................................................................................7
Theme 2: The major challenges faced and the responsive actions for the various SME's in UK
......................................................................................................................................................8
Theme 3: Opportunities and threats as posed by the external environment and the effectiveness
of the National Schemes..............................................................................................................9

CONCLUSION..............................................................................................................................10
RECOMMENDATIONS...............................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Topic:- To assess the responses of the small and the medium enterprises in response of the
Covid disruptions that are undertaken in UK.
Background of the study
Recently due to the outbreak of the Covid pandemic in UK it can evidently be noticed
that it has caused severe disruptions to many sector but especially to the small and the medium
enterprises. The small and medium enterprises has significant contribution in the growth and
development of the economy in terms of gross domestic product, employment generation,
improvement of the standards of living etc. But with the spread of the epidemic they are the
worst hit and so the current project shall be evaluating on the responses for recovery that are
undertaken by such businesses.
Research aims and objectives
Aim:- The aim behind conducting the investigation is to ascertain the responses that are
undertaken by the SME in respect of the Covid disruptions faced.
Objectives:-
 To identify the immediate responses of small and medium enterprise to recover from the
Covid disruptions in UK.
 To evaluate the business decision-making for identifying the major challenges that are
being faced by SME's in UK.
 To assess the potential opportunities and threats that are posed by the external
environment and the national schemes for SME's to sustain in the market.
Significance
As this is the most trending topic these days so it can be ascertained that it shall be of
major significance to the various groups in UK. The first could be the small and the medium
enterprises that are there in UK can utilize these responses to recover from the damages of the
epidemic. The other could be the government who affix the policies, design the national level
schemes for the relief of these businesses and also provide them with the grants as the road to
recovery. And lastly it is the future scholars who wants to study in this area can refer the
information.
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Rationale
One of the main reasons for conducting the research are to find out the responses that are
undertaken by the small and medium enterprises to recover from the damages caused by Covid-
19. Since the SME are the significant contributors to the UK economy in that case it can help and
assist the small businesses. Also the government and the other intermediaries shall be prepared to
face the Covid consequences.
Chapters summary
Chapter 1: Introduction
It shall be introducing the topic, aim and objectives of undertaking the research and also
shows the significance of the study to its related parties. It shall describe the background of the
problem.
Chapter 2: Literature review
It highlights the secondary sources of data that are relevant, copyright protected and
belong to the recent years in respect of the research problem.
Chapter 3: Research methodology
It shall be describing the technique and the methods of research that are used by the
scholar to draw inferences for the topic and accordingly make the conclusions for the same.
Chapter 4: Research and findings
The gathered data shall be further analysed applying the statistical measures and the
relevant hypothesis will be accepted to draw the conclusion regarding the same.
Chapter 5: Conclusion and recommendations
This will highlight the drawn inferences and the suggestions pertaining to the future that
can be undertaken by the small and medium enterprises so that efficient results can be derived.
LITERATURE REVIEW
Theme 1: Positive immediate responses for the SME's to recover from Covid-19 in UK and
ensure the stability of the business
As per the Dai and et.al. (2021) the positive immediate responses for the small and
medium enterprises shall be to merge or collaborate with the larger organizations so that they can
gain from the competencies and derive the benefit of synergy. This is the efficient way of
recovering from the disruptions that are made due to the outbreak of the corona pandemic. Since
the SME has the limited availability of the resources that is the reason that it should form
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strategic collaborations and partnerships such that they get benefited from it. Lu and et.al. (2021)
on the contrary specifies that a business that is hardly been able to survive in the competitive
market shall not be preferred globally for the mergers and acquisitions, rather engaging in any of
such format shall make it loose its original identity and further hampering the future existence in
the market. Beraha and Đuričin (2020) states that the other way to recovery is by downsizing the
operations of the business and shutting down the loss making ventures of the company. The
excess employees and the additional resources that are adding the costs but simultaneously are
not having the equivalent benefits for the company, then the sick units must be close down and
additional investments must be made in the growth oriented operations of the business.
In the opinion of the Song, Yang and Tao (2020) for the recovery of the small and
medium enterprises in UK which is the maximum contributor to the growth of the economy, the
government has framed policies so that these businesses can be benefited from them. It can be
evaluated that these schemes are in terms of providing the grants, subsidies, reliefs etc. to the
businesses so that the non-profitability situation of the enterprise can be revived. The various tax
reliefs, free loans, governmental grants can be used by the businesses in response of the
coronavirus so that the business can survive in the market.
Theme 2: Major challenges faced by the SME's in UK and the decision-making undertaken in
response of the same
Al-Fadly (2020) evaluates that one of the most significant challenges that the SME's in
UK face are the lack of required finances and budget in order to implement the growth and
expansionary plans. Since these businesses have the limited access to funds and the monetary
support or the loans they are not able to process their routine operations smoothly and thereby
the survival under the intense competitive pressures from the large organizations become
difficult. But now they have resolved the issue by undertaking the decision-making that can
improve the current financial crisis. They are sorted to diversify their sources of finance so that
the availability also increases and the undertaking of the risk decreases for the company.
Diversifying the portfolio shall provide better opportunities to the company. Gregurec, Tomičić
Furjan and Tomičić-Pupek (2021) contradicts that the availability of finances is not the major
issue as even if these small and medium enterprises shall be having the access to these resources
they won't be able to take the sufficient advantage regarding the same. This is because they are
not provided with the adequate infrastructure requirements and the information technology
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access which helps them in optimizing the routine operations of the business. Juergensen,
Guimón and Narula (2020) identifies that another major challenge for the SME's in UK is that
they are unable to make the effective research and development in the various fields of the
business such that they are not able to capitalize on the opportunities in the market. It can also be
assessed that they cannot optimize on the first mover advantage that can be assumed in the
industry to obtain the competitive advantage in the market. The management of these companies
have started to form the effective decisions in respect of this by outsourcing the work of the
research and development and taking the consultancy services in respect of the same.
Theme 3: Opportunities and threats for SME's in the market environment and the effectiveness
of the National schemes and the policy interventions
Lu and et.al. (2020) interprets that the various national schemes that are developed for the
benefit of SME's by the government are sufficient for it to capture the opportunities in the market
and conquer the threats that are placed by the competitors in the industry. The schemes are to
reduce the impact of Covid and provide the support to revive back the operations of the business.
One of the major benefit that is extended to all the small and medium enterprises is the tax reliefs
and the option to make the delayed payments of these tax liabilities. This shall help in saving the
earnings which can be employed in the business to further assume the growth and development.
Indriastuti and Fuad (2020) criticizes that one of the scheme benefits are in the form of the
national loan guarantee that are provided by the government and against that the free loans are
being extended to the SME. But this can also pose the threat of the financial liability on the
company wherein in future they are burdened to pay back the loans while having the
insufficiency of the funds. In the views of the Syriopoulos (2020) it can be identified that the
opportunities for the business is in the form of grants that can be availed from the government
but these are limited and can be accessed by the limited businesses. In that case it becomes the
major threat for some business to survive without availing the basic grants that are provided by
the government. So it can be classified that the national scheme is an opportunity for some and
acts as the threat for the rest.
RESEARCH METHODOLOGY
Research type
There are two types of research that can be undertaken by the scholar in order to fulfil the
aims and objectives of the study. The first is the qualitative type of research which involves the
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analysis of the facts and figures, opinions and the motivational aspects in respect of the research
issue and the other is the quantitative research that shall be involving the investigation of the
numeric figures and derives the optimum solution for the same. Moreover, for undertaking the
current study the researcher shall be analysing the qualitative facts and framing the hypothesis
accordingly with the aim to evaluate the impact of Covid-19 on the small and medium
enterprises in UK and the schemes for its recovery. The findings shall be derived on the opinions
of the employees in these businesses.
Research approach
The approaches pertaining to the research can be classified into two types inductive and
deductive which are further applied to gain the deeper insights into the research issue. The
inductive approach is for deriving the newer theories and on the other hand the deductive
approach is used to test the existing theory in the business. The deductive approach can be
applied for the analysis of the quantitative data to draw the inferences from it. In the current
study the scholar shall be using the inductive approach by observing the patterns of the
investigation with the main objective of undertaking the study effectively.
Research philosophy
With the motive to conduct the research and solve the research problem there are two
types of philosophies that can be applied interpretivism and positivism. The interpretivism
research philosophy is generally applied to the qualitative type of research wherein
systematically the qualitative facts shall be investigated. In contrast to this the positivism
philosophy is applied to the numerical data that is being collected to be referred for the research
problem. Since in the recent study the qualitative aspects related to the impact on the small and
medium enterprises is done that is the reason the scholar shall be employing the interpretivism
philosophy. It is important to find out the extent to which such impact is being felt by the
employees of the small and medium enterprise.
Data collection
The data in respect of the research topic can be collected by either gathering the
information from the primary sources or the secondary sources. The primary data is the first hand
information that is being collected by the scholar using the technique of survey and against it
also the secondary data can be used which already exists in the published form in the books and
magazines. This shall help in deriving the clear understanding regarding the topic of issue. In the
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current investigation the researcher shall use the secondary data to identify the impact on SME in
UK and the modes of recovery that are developed in response to the following problem.
Data analysis
In order to analyse the data set the scholar can apply two types of the data analysis
technique one is the thematic perception test technique and the other is the statistical package of
the social sciences. But for undertaking the current research and drawing the inferences
regarding the SME's in UK, the thematic perception test technique is applied for qualitative
aspects of the problem.
Reliability and validity
In order to maintain the reliability and validity of the data the scholar needs to ensure that
the secondary sources which are used for generating the deeper insights into the topic must be
copyright protected. Apart from that it needs to be carefully identified that the research papers of
the previous investigators that are used must belong to the recent years and also they are relevant
to the research topic that is being investigated by the scholar. Moreover, since the objectives
might not be exactly same that is the reason the minor modifications are to be made.
Research limitations
The major constraints at the time of the research conduction is related to the scarce
availability of the resources in the organization and this leads to the lack of the applicability of
the research technique of Statistical Package of Social Sciences. The major limitations arise in
the respect of the limited time, money, manpower and the other resources that can be required in
the execution of the work. But these limitations pertaining to the research are avoided using the
thematic perception test technique effectively to draw the relevant inferences.
Ethical considerations
In order to comply with the ethical standards of the research it needs to be identified that
the researcher before starting the investigation must get the consent forms signed by all the
respondents of the survey regarding their willingness of participation. Apart from that the
reference list must be specified at the end of the project showing that the data is not copied from
the secondary sources of information.
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RESEARCH AND FINDINGS
Theme 1: SME policy responses to recover from the Covid-19 situation in UK in order to
maintain the stability of the business
In order to maintain the stability of the business and to recover from the situation of
Covid-19 the small and medium enterprises had tried various immediate responses that can
positively impact the business. These responses could either be sought through the governmental
support, National schemes in rescue of such businesses, or they capitalized on the available
opportunities and threats that were posed by the external environment (Dandara, Dzobo and
Chirikure, 2021). The SME's that operated globally accessed the UK export finance facilities and
also secured the health advice from the international trade department. Most of the SME's in UK
were finding difficulties pertaining to the arrangement of funds to finance the operations but the
Bank of England lowered down the interest rates so that the SME obtained the cheap loans and
also for some the government provided loan guarantee scheme so that they can easily avail the
loans and recover the businesses.
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The government funds were employed so that the businesses can revive from the tough
times, and they can fund their growth and prosperity in the market (Coronavirus (COVID-19):
SME policy responses, 2019). For this they were provided the various grants for the specific
activities, packages were released so that self-employed can be entitled to the sick pay, subsidies
in various governmental revenues and the tax reliefs or the permissibility of making the deferred
payments of tax by the businesses. There were numerous schemes that were available for the
small and medium enterprises that could be applied to ensure the smooth flow of trade and the
movement of goods and services of the employee. These all were ensured in the National
Scheme that was implemented by the Government.
Apart from this the last lending resort for the small businesses so that they can compete in
the market and prosper through the growth (Jung and et.al., 2020). The SME's in UK as the
means to recover from the epidemic, loss and disruptions in the form of supply chain, demand
and supply, availability of the resources and the required manpower shall be leading to the poor
financial performance of the business. In order to recover from this the company shall be
planning the mergers and acquisition with the larger companies so that they can survive in the
market and assume the benefit of synergy. They can outsource the various activities like research
and development, technological optimization and efficient financial reporting so that they can
compete in the markets based on the availability of the required resources. As per the various
secondary sources and the data collected these are some immediate policy responses that are
taken by the management of the SME in response to the Covid situation.
Theme 2: The major challenges faced and the responsive actions for the various SME's in UK
With the outbreak of Covid pandemic the small and medium enterprises were severely hit
affecting its performance in the business and this was the reason that they employed the several
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responsive actions such that they can rescue from the after-effects of the pandemic. There were
serious challenges that were faced by the businesses that were the result of the various
governmental restrictions that were posed in the form of the lock-down, social distancing,
travelling restrictions and the serving of the quarantine periods (Eggers, 2020). In case of the
supply chain it was disrupted as the labour was not available and the movements were being
restricted. This hampered the overall processing of the business operations in the company.
Apart from that the demands for the products and services also dropped significantly and the
major reason was that the disposable income reduced with the customers ultimately leading to
the reduced purchasing power. This lead to the businesses face the tighter liquidity spot. The
higher level of vulnerability and the lower level of resilience led to the reduced confidence in the
conduct of the business.
The impact of the Brexit policy has also impacted the SME's in UK and the major reason
behind that is also that the employment and the free trade policies have been restricted. The
imposition of the duties and the taxes to avail the benefits of European Union were also further
leading to the disruptions in the business (Weng and et.al., 2020). One of the major causes of the
challenges is that the sectors into which the small and the medium enterprises are badly affected
by the outbreak of the corona pandemic in the country. The wholesale and the retail market of
the businesses related to the transport, tourism, hospitality and the public places like the malls,
adventure parks, cinema halls etc. The major proportion of the SME's are indulged in these
activities and that is the they are the highly affected sectors in the economy. The major challenge
is faced due to the cash buffers and the financial fragility that is suffered by the company as the
result of the credit crunch in the times of the corona pandemic.
The other major challenge that needs the quickest possible responses is the disrupted
logistics and the supply chain of the company which is due to the restrictions of the movements
and this is the reason that neither the raw material are reaching on time nor the finished goods are
made timely available to the customers in the company.
Theme 3: Opportunities and threats as posed by the external environment and the effectiveness
of the National Schemes
Even post the disruptions that are made by the Covid- 19 situation there are various
opportunities that can be capitalized upon by the small businesses and also through these the
threats that can be posed are to be conquered. There are lot of opportunities in terms of
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refinancing, reinvestments, mergers, acquisitions and the collaborative partnerships in the
business that can benefit the companies in several ways like synergy (One year of SME and
entrepreneurship policy responses to COVID-19: Lessons learned to “build back better”, 2019).
Apart from this the businesses can also start a fresh through establishing the new and innovative
start-ups, redirect the knowledge, skills and the networks such that the company can enter new
markets and optimize the operations to gain the competitive advantage regarding the same.
Majorly the threats are in the form of the competition in the market, complying by the
governmental policies and lack of demand and supply of the products in the market. Apart from
that it can also be assessed that the insufficiency in the liquidity and the cash buffers is also the
reason that the company shall not be able to survive in the business.
The National scheme that is devised by the UK government is built in support of the
various small and the medium enterprises that are formed to support the economy and are badly
suffering due to the situation of the Covid-19. In order to rescue these companies from the
situation of Covid the government are supporting through the National scheme and has also lead
to the providing the financial assistance for the mode of recovery (Liao and et.al., 2020). They
have separated funds that are for providing the grants and also packages that are helping the
company in the path of recovery. There are also the loan guarantee schemes for the company that
are helping them to acquire funds for the conduct of the smooth operations in the business. These
funds are easily available to the company which are backed by the guarantee that is provided by
the UK government. Apart from that the interest rate have also lowered down by the Bank of
England so that the cheap loans can be available. They are also permitted for the deferment of
taxes and also some items are exempted to support the vendors. This is the result that the
company are able to survive in the market among the tough competition in the company.
CONCLUSION
From the above project and the secondary research conducted on the impact of the Covid-
19 on the small and medium enterprises and further their responsive actions that are taken by the
businesses for recovering from the severe hit, shows that how these businesses are significantly
contributing to the economic growth and development and similarly how the Government has
devised the National scheme in support of these businesses. It can be known that the businesses
have been using the grants, tax deferment, loan guarantee scheme in the process of rescuing it
from the tighter liquidity spot in the country.
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RECOMMENDATIONS
These can be the following recommendations for the small and the medium business so
that they can seek to recover from the situation that has occurred through the corona pandemic
and the ability to survive has shaken:-
 Firstly the businesses must focus on taking the assistance from the UK Government
under its various policies and the packages that have been exclusively developed to help
the small businesses.
 If the company is facing the financial fragility and the tight liquidity spot then in that case
they should obtain the loans under the loan guarantee scheme as designed. As to obtain
credit for the company becomes difficult due to the lack of credibility and the liquidity
position, so they should go for obtaining the loan on the guarantee of the government.
This shall be making the accessibility of the loan easy for the company.
 If the companies find it difficult to survive in the market then in that case they shall be
having the options related to mergers and acquisitions, collaborative partnerships and
outsourcing several activities like the research and development and the technological
optimization.
 They can optimize on the various opportunities that are present in the external
environment and this is the reason that they shall be fostering growth through better
business decision-making. The companies need to redirect the resources, enter the new
markets, diversify operations, reinvestments etc. to survive in the competition.
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REFERENCES
Books and Journals
Syriopoulos, K., 2020. The impact of COVID-19 on entrepreneurship and SMEs. Journal of the
International Academy for Case Studies. 26(2). pp.1-2.
Indriastuti, M. and Fuad, K., 2020, July. Impact of covid-19 on digital transformation and
sustainability in small and medium enterprises (smes): A conceptual framework.
In Conference on Complex, Intelligent, and Software Intensive Systems (pp. 471-476).
Springer, Cham.
Lu, Y. and et.al., 2020. The perceived impact of the Covid-19 epidemic: evidence from a sample
of 4807 SMEs in Sichuan Province, China. Environmental Hazards. 19(4). pp.323-340.
Juergensen, J., Guimón, J. and Narula, R., 2020. European SMEs amidst the COVID-19 crisis:
assessing impact and policy responses. Journal of Industrial and Business
Economics. 47(3). pp.499-510.
Gregurec, I., Tomičić Furjan, M. and Tomičić-Pupek, K., 2021. The impact of COVID-19 on
sustainable business models in SMEs. Sustainability. 13(3). p.1098.
Al-Fadly, A., 2020. Impact of COVID-19 on SMEs and employment. Entrepreneurship and
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Song, H., Yang, Y. and Tao, Z., 2020. How different types of financial service providers support
small-and medium-enterprises under the impact of COVID-19 pandemic: from the
perspective of expectancy theory. Frontiers of Business Research in China. 14(1). pp.1-27.
Beraha, I. and Đuričin, S., 2020. The impact of COVID-19 crisis on medium-sized enterprises in
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Lu, L. and et.al., 2021. Perceived impact of the Covid-19 crisis on SMEs in different industry
sectors: Evidence from Sichuan, China. International Journal of Disaster Risk
Reduction. 55. p.102085.
Dai, R. and et.al., 2021. The impact of COVID-19 on small and medium-sized enterprises
(SMEs): Evidence from two-wave phone surveys in China. China Economic Review. 67.
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Liao, Q. and et.al., 2020. Public engagement and government responsiveness in the
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Weng, S. H. and et.al., 2020. Responding to the coronavirus pandemic: a tale of two cities. The
American Review of Public Administration. 50(6-7). pp.497-504.
Eggers, F., 2020. Masters of disasters? Challenges and opportunities for SMEs in times of
crisis. Journal of Business Research. 116. pp.199-208.
Jung, S. Y. and et.al., 2020. Real-world implications of a rapidly responsive COVID-19 spread
model with time-dependent parameters via deep learning: Model development and
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Dandara, C., Dzobo, K. and Chirikure, S., 2021. COVID-19 pandemic and Africa: From the
situation in Zimbabwe to a case for precision herbal medicine. OMICS: A Journal of
Integrative Biology. 25(4). pp.209-212.
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Coronavirus (COVID-19): SME policy responses. 2019. [Online] Available through:
<https://www.oecd.org/coronavirus/policy-responses/coronavirus-covid-19-sme-policy-
responses-04440101/#endnotea0z6>
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“build back better”. 2019. [Online] Available through:
<https://www.oecd.org/coronavirus/policy-responses/one-year-of-sme-and-
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9a230220/>
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