Approach

The dashboard will feature results from six cycles of surveys that will be conducted from May 2020 till August 2021.

Currently, data is available for the following five survey rounds conducted between May 2020 to July 2021:

Cycle 1: May to June 2020

Cycle 2: July to August 2020

Cycle 3: September to October 2020

Cycle 4: December to January 2021

Cycle 5: June to July 2021


STORIES FROM THE FIELD

The crisis has forced me to rethink my current business, I am now planning to set up a mobile snack shop and hire my workers again.

S.Mothinath, Kancheepuram

Survey Method

Our stratified, convenience sample was drawn from various sub-industries in manufacturing, services and trade to provide a sectoral representation of microbusinesses. The sample was selected from lists provided by partner organizations. The following regions and states are being covered in the survey:-

North region: Delhi, Haryana, Punjab and Uttar Pradesh, West region: Gujarat and Maharashtra and South region: Tamil Nadu. The surveys are translated into regional languages and administered remotely, over phone.


STORIES FROM THE FIELD

I have found a new beginning after the lockdown hit my bakery business. I have tried mushroom cultivation and have now started selling sprout grains.

Chandrasekar, Trichy


STORIES FROM THE FIELD

I applied for a loan from the bank (jewel loan pledging my wife's jewellery) for an amount of Rs 50,000 for my business. However, I did not get the loan on time from the bank. I am now planning to ask my friend for help again, because the second lockdown has affected the business badly.

Murugan, Tirunelvelli


STORIES FROM THE FIELD

Before the second lockdown, I took a loan from my SHG to improve my doll business. 50% was spent to repay my previous debt which I had incurred after the first lockdown (March 2020), the remaining 50% was used to buy raw materials for my business. Sales were picking up after this, until the second lockdown was announced. Vendors are not willing to procure the dolls and we have not received payments for earlier orders. I expect sales to pick up only during this festive season, as the rainy season is starting when sales dip again.

Renuka, Kanchipuram


Financial Performance

Insights: The overall sales and profits of small businesses have increased over the study period, but are still lower than the pre-lockdown (March 2020) levels.
Description: Businesses showcased consistent growth (CAGR) in sales figures by around 15%, despite profits getting a hit in cycle 5. The overall business performance, meanwhile, paints a bleak picture, as only 10% of the businesses stated that they are performing better than March 2020.


Cash reserves/personal savings

Insights: Cash reserves have been consistently depleted, eating up the personal savings of business owners.
Description: Cashflow disruption due to low sales has been reported as the biggest challenge across most enterprises. The businesses witnessed increased pressure on their cash reserves, especially due to the two covid waves. Businesses are relying on their personal savings as a coping strategy to overcome this financial strain. In the first cycle, while 40% of enterprises in the sample reported having cash reserves, 65% of them reported having used their personal savings to tide over the crisis. Improvements were witnessed in cycle 4, where 38% of enterprises reported having cash reserves while entrepreneurs who dipped into personal savings fell to under 19%. However, post the second wave i.e. in the fifth cycle, 51% of enterprises had used their personal savings and 75% of enterprises did not have any cash reserves.

Employment across Industries

Insights: The rise in layoffs corresponds to the decline in availability of cash reserves, while hiring seems more driven by actual/anticipated demand.
Description: Service sector firms reported higher layoffs as a correcting mechanism to tide over the crisis. Post this, they have been showcasing higher sales and profits and even tend to hire more in the future. Layoffs among manufacturing firms have been more consistent across cycles, given the nature of the sector where labour-related compliances are higher. The intention to hire has also been consistent, after initial shocks in cycle 1, and manufacturing units seem more optimistic about business prospects.

Challenges in operating businesses

Insights: Across all cycles, low sales/customer footfall has been the greatest challenge for small businesses.
Description: Low sales and customer footfall has been a persistent challenge for businesses across cycles; in from cycle 1, 86% of business owners cited this as a major challenge in operating; similarly, in cycle 5, 76% of businesses reported this as a major challenge. Shortage of raw materials was a bigger challenge in cycle 1, given the impact of lockdown on supply chains, while petty cash management is reported to be a bigger challenge in cycle 5 given the vagaries of the sector, compounded by inadequate working capital and depleting cash reserves of businesses.