Background of the Study

We all know that when it comes to Covid-19 there are many people died and
supper, also our economy is shut down because of the global lockdown there are
many businesses are close even its macro o micro In short, we find that micro and
small businesses experienced a larger decline in businesses activity compared to
medium and large firms—an unsurprising finding since most of the country’s
micro and small businesses halted operations due to their inability to implement
preventative health measures such as provision of on-site lodging for employees,
and sanitizers and handwashing equipment for customers.

Covid-19 pandemic outbreaks have led many countries to impose travel

restrictions and movement controls. In Malaysia, the small business sector is one
of the most directly affected by the movement's control order. In fact, the impact is
more significant among micro-enterprises than its larger counterparts.
Entrepreneurs experience business cancellation or closure and reduced income due
to the closure of several supporting sectors such as retails and transportation.

There is still a lack of study on the impact of a pandemic outbreak on micro-

enterprises in developing countries, especially in relating to business continuity
and recovery strategy. It is crucial to explore how micro-entrepreneurs experience
crisis and what decision they make for business survival. This study represents the
perspectives of two micro-entrepreneurs in the rural area of Sabah, about their
business continuity strategy during movement control order. The results of
unstructured phone interviews provide insights on business survival approach and
recovery plan of micro-enterprises during and after a crisis. This study will
hopefully contribute towards the creation of effective support mechanisms through
associated entrepreneurial development organizations for micro-entrepreneurs to
thrive during and after a crisis. On the other hand, the majority of the medium and
large firms do not foresee closure. Sectoral analysis reveals slightly higher
resilience among agriculture and manufacturing firms compared to service sector
firms.

In addition to the lower demand and higher costs of safety measures, responding
businesses shared other worrying concerns, including lessened production and
productivity, reduced supply of inputs, and credit and liquidity constraints. Notably, a
relatively high percentage of small and medium businesses in the services sector in
particular reported a decline in access to credit and financial liquidity compared to
large businesses. This trend may be because lending institutions already consider them
highly risky, and those businesses are more likely to become insolvent if COVID-19
persists and restrictions are maintained. On a sectoral level, high percentages of
businesses in manufacturing and services reported a decline in ability to repay
outstanding debts due to the outbreak of COVID-19 compared to those in agriculture.
This finding might suggest that fewer businesses in agriculture qualify for credit.
Even for those with loans, the amounts are relatively small—a sign of how poorly
agriculture is resourced as far as access to credit is concerned.

The COVID-19 impact varies by type of business, with these three categories most
affected: personal service, hospitality and retail. The smaller the company, the
harder the hit, with companies with fewer than 20 employees most affected.
Why? Because a small business with fewer than 20 employees typically lacks cash
flow and capital. Those companies were the first to reduce hours for employees or
lay off employees. Those businesses were also the first to stop hiring
subcontractors.

Those businesses had a challenge, and will experience the most extreme negative
impact, said Laurie McCabe, SMB’s cofounder and partner. They had to learn how
to serve customers in the new stay-at-home environment.
McCabe said that continuing to operate has been impossible for small businesses
which provide hands-on services, such as hair salons and spas, home improvement
and repair contractors, and for many dental and medical offices.

Because of Covid-19 the new normal exist to prevent the virus spread rapidly,
there will be a new normal, where people learned to do business in different ways,
McCabe said. Maybe your business was a law firm or financial planning, and
everybody used to come to the office.
So, you offered them a way to talk to you using face time or video conferencing,
she said. And this is likely something you’ll continue to offer to customers going
forward, Meetings between staff and clients, as well as meetings between staff and
management, became virtual, as companies turned to video conferencing and
conference calls to conduct meetings.
That’s something that was done out of necessity, McCabe said. “But as a cost-
saving measure, it may continue in the future.