Abstract
This study aims to analyse the real impact of the COVID-19 pandemic for small businesses and what recuperation strategy needs to be implemented from the perspective of business owners including opportunities for using digital business technology and what the business owner expects from government to help the recover. This research was conducted using a quantitative descriptive method. Data collected using online questionnaires, through various MSBE communities in Aceh. 150 questionnaires distributed using non-probability sampling. In addition, several interviews with respondents were conducted to gain insight into the impact of covid-19 on their business. The spread of Covid-19 did have a negative impact on the small businesses that were respondents in this study. The biggest impact is the decline in sales because the demand for its products and services is decreasing. As a result, employers did the downsizing of by decreasing their business scale, and laying off employees. Entrepreneurs also ask for debt restructuring in banking institutions to reduce pressure on the declining cash in the company. At the same time, companies are starting to use technology to enter digital businesses, including joining online applications and selling in e-markets more intensively.
Highlights
Micro, Small and Medium Enterprises (MSMEs) are one of the sectors most affected by the Covid-19 pandemic, including MSMEs in Aceh Indonesia
This phenomenon is supported by Bank Indonesia research which states that as many as 87.5 percent of MSMEs are affected by the Covid-19 pandemic Of this amount, around 93.2 percent of them were negatively affected on the sales side which put pressure on profits and cash flow [3]
Several interviews with respondents were conducted to gain insight into the impact of covid-19 on their business and of which 50 are small businesses which are assisted by the Syiah Kuala University Business Incubator, most of which are located in Banda Aceh and Aceh Besar
Summary
Small and Medium Enterprises (MSMEs) are one of the sectors most affected by the Covid-19 pandemic, including MSMEs in Aceh Indonesia. Old business strategies like brand equity, more advertising spend, and big promotions are less relevant in an age when consumers have access to so much word of mouth [7] This pandemic affects the development of small enterprises. The contrasts between MSMEs – and smaller firms – and big companies keep on being critical, with MSMEs take-up of advanced innovation generally a small portion of that by bigger companies [7] The weakness of these small companies converted into a sharp decrease in income since the beginning of the pandemic at a rate quicker than their capacity to reduce working expenses, compromising an expected liquidity emergency among MSMEs. Between January 1 and April 1, 2020, US MSMEs income diminished by 40% to half [11] with income in January 2021 still down 31% contrasted with the earlier year. All MSMEs experience issues in doing their commitments to the banks
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