The Covid-19 pandemic, which began in early 2020 and continues to limit everyday life in 2021, has brought a lot of the unknown, exhausting and difficult. Because Covid-19 is a highly transmissible (eg. coughing or sneezing) deadly respiratory virus, it has led many governments to close or strongly limit the activity of non-essential companies, businesses, or institutions for weeks or even months in an effort to limit the spread of the virus.
These continue to prevent many small businesses, including those with positive social impact, from generating income and helping the environment and society. It is economically or socially disadvantaged communities that are hit the hardest by this pandemic. Although research on entrepreneurship is limited, in this article we will offer you a quick overview of struggles and negative impact originated by ongoing pandemic on social enterprises.
Based on research conducted in the UK, the biggest problem social entrepreneurs have encountered is finance. In various stages of site-based closure and coronavirus spread, non-essential enterprises have been and are closed in most countries. This causes in most cases a sharp decline in sales, indebtedness due to repayment of loans for the operation of the company. Social entrepreneurs do not have financial reserves or have trouble receiving start-up and investment funding. They also face the problem of closure and the disappearance of jobs created for the disadvantaged people they employ.
Another challenge that social entrepreneurship faces is the management of their social and at the same time economic goals in a time of pandemic. In social entrepreneurship, there should be a balance between financial sustainability and maximizing the positive social impact. Some companies will start to deviate from their importance or mission because they are overly pursuing higher economic goals or are being pushed by the situation to do so. And the main idea of the concept of social entrepreneurship suffers.
Social enterprises are also facing a rapidly changing environment and ongoing uncertainty in this crisis. They have to fight daily the pandemic measures, reopening and re-closing. Institutional cooperation and partnerships are also important and necessary for social enterprises, which in the time of a pandemic do not have the opportunity to sufficiently develop and benefit from them. Local businesses that do not have a sufficiently large network of customers or sponsors do not find it easy in this situation.
If we look at it from the other side of the coin, social businesses are showing their potential right now. Nowadays, many people realize the importance of these businesses and want to support them. We can see the trend of support for smaller, local businesses with the impact on the community and also on the environment. Also corporations are starting to incorporate social enterprises in their local areas more, more than just relying on the global supply chains. Recently (for some we can say that also thanks to Covid-19) various new and unknown topics that social enterprises deal with have started to emerge in the public discussions in society according to this article/research. These topics include climate change, gender inequality, racial injustice or other systemic problems that reveal gaps in the foundations of modern society.
Another significant strength of social enterprises is definitely the ability to rapidly adapt to new conditions and environments. This translates into the delivery of much-needed services and supplies (face masks, soap, medicine, and more) to hundreds of thousands of people. They also help with the tutoring of compulsory school children and support them in their growth and in various cases also help people struggle with mental health during these difficult times.
When we look at the social entrepreneurships in the countries of V4 (Slovakia, Czechia, Hungary and Poland), one can see a great potential for the future. However, social entrepreneurship has a legislative background only in Slovakia, but its support is strong among every member of V4. Nowadays there are 173 social enterprises registered in Czechia with an annual money turnover of 2 069 520 904 KČ (cca 81 157 682 €). The first article published about social entrepreneurship in V4 was in Hungary in 2010. One of the most successful social enterprises in Hungary is Elderberry Cafe, where there are no waiters, only volunteers of any age that share their stories and wisdom through the food they cook and serve. Despite members of V4 were hit the hardest in Europe with pandemic, social enterprises had and still has a big role of building society in these quickly developing states.
While it may seem that social entrepreneurships have suffered from this pandemic, many of them have dynamically adapted to this situation and brought new opportunities to their community to be useful to their surroundings and to themselves.