IMPACT OF COVID-19 ON SME’S OF PAKISTAN

Abstract

COVID-19 has seriously affected the world's economy and is influencing businesses in ways we cannot comprehend right now. Different companies faced different challenges and recorded unexpected profits and losses. Businesses faced challenges, including supply chain disruptions, uncertain demand, cancellation of exports, supply shortages, restricted business hours, and transport disruptions. However, at the same time, businesses had to adapt to remote working, social distancing, collaboration through online mediums, rethink their go-to-market strategy, embrace eCommerce, and pivot business models to stay afloat during the crisis. The dominant assumption is that the SMEs (B2B and B2C) are in deep water due to lockdowns, as they were implemented as a counter-strategy to prevent the spread of COVID-19. Data was collected from 195 business owners/managers representing SMEs via a close-ended survey questionnaire. The collected data was analysed through various statistical techniques including Hayes Process to test the hypothesis using SPSS software. The findings indicate that strategic flexibility, business operations, and business sustainability significantly correlate to SME's performance with COVID-19 as a moderator variable. Contrary to the popular belief, based on the research results, the SMEs performance in Pakistan improved during COVID-19. Furthermore, risk management strategies have been proposed based on the study results.