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ACADEMIA Letters ENTREPRENEURSHIP AND COVID-19: CHALLENGES AND OPPORTUNITIES Edwin Oche Introduction This article is aimed at examining the consequences of corona virus pandemic (COVID-19) on entrepreneurship in the UK, with specific focus on the challenges posed to small scale businesses as well as the opportunities they can harness, leverage on or tap into in order to continually be in business. As important as small & Medium-sized enterprises (SMEs) and their contribution are to the UK economy, recent studies conducted so far have shown that entrepreneurs are seriously being threatened by the latest pandemic (King’s Fund, 2020). This fact is evident in the report by some recent studies indicating effects and opportunities. Stephan et al (2020) conducted a study during the height of Covid-19 lockdown (from May to July, 2020) in the UK to investigate the effect of the pandemic on SMEs and the owners themselves. 361 entrepreneurs were sampled by the researchers and results showed that about 61% of the sampled respondents reported that trading activities reduced drastically due to covid-19. This was evident in certain areas like paying for supplies and running costs which in all proved difficult to achieve (Hopley, 2021). Though, the occurrence of covid-19 opened up certain opportunities which SMEs could tap into to enhance business activities, but the pandemic made owners of SMEs to regularly battle with other business activities like receiving payments, postponing or cancelling orders and work, and funding from investors which placed the continuous survival of their business under serious attack and threat (Stephan et al, 2020:6; Albonico et al, 2020: 4). This was confirmed by a research conducted by Greene & Rosiello (2020) which surveyed 565 scaling firms in UK to know how their performance is Academia Letters, June 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: Edwin Oche, ocheedwinoche@yahoo.com Citation: Oche, E. (2021). ENTREPRENEURSHIP AND COVID-19: CHALLENGES AND OPPORTUNITIES. Academia Letters, Article 1141. https://doi.org/10.20935/AL1141. 1 affected by covid-19 and found out that 68% of SMEs sampled have challenge with cash flow; 59% are seeing significant fall in business turnover; 51% are encountering issues with supply chain, while 6% expect to fold up their business due to the prevalence of the pandemic. In relation to labor and employment, studies have shown that the prevalence of covid-19 has also made owners of SMEs to face serious challenge with staffing, and more especially retaining staff and paying full salaries (Smith, 2021; Stephan et al, 2020). Due to this challenges, the UK government launched the Corona-virus Job Retention Scheme (CJRS) in March 2020 to assist employers pay salaries and wages of their employees (HM Government, 2021). This constitutes a huge opportunity for employers who were charged to apply for the grant to be able to pay some of their workers’ wages (The King’s Fund, 2020; OECD, 2020). However, the study conducted by Smith (2021) noted that the Covid-19 Job Retention Scheme did not permanently end the loss of job but only reduced it temporarily. In the same vein, the study by Stephan et al (2020: 7) shows that 45% of employers of SME sampled in this study applied for the scheme but businesses that are up-coming could not gain from the scheme due to their inability to show revenue track record of 2 years and above. HM Government (2021) noted that the challenges created by the prevalence of covid-19 have put around 16.6 million jobs at risk in UK. However, entrepreneurs are optimistic as about 73% of them sampled by Stephan et al (2020) expected that over the next 5 years more workers will be added to their business. Despite this high hope and confidence about the future, most owners of SMEs are in uncertain situation as about 49% sampled by Albonico et al (2020) were only planning for the next 1 year while approximately 53% surveyed by Hopley (2021) anticipated that if the present pandemic do not stop, their money will finish within the next one year. Additionally, the entrepreneurs in the study by Stephan et al (2020) predicted that their businesses might not be able to survive if the second wave of the pandemic occurred. This was confirmed in the research by Smith (2021) who noted that more than 840, 000 owners of small businesses across UK are not sure if their business will ever come back to what it used to be before the outbreak of corona virus. In relation to mental health, some studies have shown that owners of small businesses in UK have suffered from series of mental illness due to the disruptions caused to their business operations by covid-19 and this has worsened their life satisfaction and perceived stress thereby making it difficult for them to cope with the business environment (Stephan et al, 2020; NHS, 2020). Mental Health UK (2021) noted that some entrepreneurs experienced more stress mentally due to the adverse effect of covid-19 on their business. Public Health England (2021) claims that about 29% of the entrepreneurs surveyed in their study had common mental disorders (CMD). Smith (2021) in his research discovered that 42% of entrepreneurs without CMD less than a year earlier had CMD in April 2020. Academia Letters, June 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: Edwin Oche, ocheedwinoche@yahoo.com Citation: Oche, E. (2021). ENTREPRENEURSHIP AND COVID-19: CHALLENGES AND OPPORTUNITIES. Academia Letters, Article 1141. https://doi.org/10.20935/AL1141. 2 Furthermore, NHS (2020) argued that most psychological shocks and tensions resulting from loss of money and business deals were at their pick in April 2020. Public Health England (2021) added that monthly prevalence of CMD among owners of small businesses in UK increased by 9% in July 2020. Mental Health UK (2021) confirmed that stressors associated with loss of workers, money issue, and slowdown in business activities continued to increase CMD among owners of small businesses in UK. A recent survey by Smith (2021) among 765 owners of small businesses across the UK showed that 82% of entrepreneurs have suffered from poor mental health in the last 1 year. The worries over loss of money and decrease in business activities are identified as being responsible for the biggest effect (NHS, 2020). However, despite the effect of covid-19 on their mental wellbeing as well as the challenges it introduced, the entrepreneurs sampled in the study by Stephan et al (2020) said that the occurrence of covid-19 has introduced certain positive changes in their mode of operation. For instance: the entrepreneurs sampled in the research by Kiem (2021) noted that tasks are now fully performed remotely and more efficiently and productively. Remote performance of tasks according to Hopley (2021) helped owners of small businesses to save costs. Albanico et al (2020) discovered from their research that 80% of the entrepreneurs sampled were able to save over 50% of their running costs. 63% of the small business owners sampled in the research by Kiem (2021) said that they were able to reduce their running costs by 45% due to the adoption of remote working. However, Greene & Rosiello (2020) found out that remote working made most entrepreneurs who started working from home to combine work with household chores/caring for children and these added and increased pressure and stress which in turn made work more challenging for the business owners. Another notable opportunity for SMEs is the financial support measures put in place by the UK government to enhance owners of small businesses towards handling certain expenses which could not have been made due to the disruptions caused to their sources of income by the occurrence of covid-19 (OECD, 2020). The most famous is the covid-19 job retention scheme to enable employers grant temporary leave to workers (HM Government, 2021); this is followed by government loans and cash grants available through local councils and innovate UK; deferral of tax payments; and self-employed income support scheme (HM Government, 2021).The study by Stephan et al (2020) noted that about 73% of the entrepreneurs surveyed applied for government support; Greene & Rosiello (2020) said almost 3 in four entrepreneurs sampled applied for government support, while Smith (2021) claims 90% of the sampled owners of SMEs applied for the support from the UK government. Kiem (2021) noted that existing business practices and models as well as digital/internet facilities were opportunities for entrepreneurs. Stephan et al (2020) claims that owners of small businesses reviewed existing practices and models and applied them to their businesses Academia Letters, June 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: Edwin Oche, ocheedwinoche@yahoo.com Citation: Oche, E. (2021). ENTREPRENEURSHIP AND COVID-19: CHALLENGES AND OPPORTUNITIES. Academia Letters, Article 1141. https://doi.org/10.20935/AL1141. 3 while leveraging digital and internet capabilities. Moreover, OECD (2020) noted that during the covid-19 lockdown, nearly 50% of SMEs were able to catch new business opportunities (especially in the digital world) by creating new products and services to accelerate their existing businesses while meeting the unexpected rise in the demand for products and services brought about by the covid-19 crisis. For instance: Biofresh Group Ltd, a food technology manufacturer based in Newcastle has products to keep food produce fresh; prior to the outbreak of covid-19, these products formed 90% of the company; but as covid-19 came in, sales of these products dropped drastically and due to the nature of demands brought about by the pandemic, Biofresh Ltd immediately opened up another area of the business and designed a product called “Cubo3”, a sanitization product created to disinfect a number of internal locations such as hospitals, public transport, care homes, hotels, ambulances, and learning centers (Laister, 2020). Conclusion The owners of small businesses in the UK need adequate support to build their businesses and continue to survive in the midst of the pandemic. It is recommended that support should be provided to SMEs quickly and unconditionally to fully enhance and equip them to survive in the face of the crisis. It is important to recognize that SMEs are the backbone of the UK economy, they contribute 52% of the total turnover generated by the private sector, and they employ 60% of the entire workers of the private sector (Stephan et al, 2020). These should be considered so as to intensify the provision of support to them. 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(2021). ENTREPRENEURSHIP AND COVID-19: CHALLENGES AND OPPORTUNITIES. Academia Letters, Article 1141. https://doi.org/10.20935/AL1141. 5 2021 The King’s Fund (2020) “our leadership support and analysis on Covid-19 (corona virus)”, available at https://www.kingsfund.org.uk/topics/covid-19?search=&page=1, accessed on 11th April, 2021 Academia Letters, June 2021 ©2021 by the author — Open Access — Distributed under CC BY 4.0 Corresponding Author: Edwin Oche, ocheedwinoche@yahoo.com Citation: Oche, E. (2021). ENTREPRENEURSHIP AND COVID-19: CHALLENGES AND OPPORTUNITIES. Academia Letters, Article 1141. https://doi.org/10.20935/AL1141. 6