Sun | Jul 12, 2020

Herms Stanley | How COVID-19 changes the business landscape

Published:Thursday | June 25, 2020 | 12:11 AMHerms Stanley/Guest Columnist
In this April 30 photo, a store with a ‘Going out of business’ sign is shown in North Miami Beach, Florida, USA.
In this April 30 photo, a store with a ‘Going out of business’ sign is shown in North Miami Beach, Florida, USA.

COVID-19 has brought a lot of deaths and destruction with it, and we will all take a long time to heal. From a business perspective, it has brought valuable experiences and changes to how one develops and operates a business. These are changes many institutions didn’t think they need until COVID-19.

Oftentimes, changes are only made by larger organisations in the business sector and trickle down to small and medium enterprises (SMEs). However, it must be noted that COVID-19 had a direct impact on SMEs, and as such, they also must not only accept the trickle-down changes from larger organisations, but also make changes to how they operate. Below are a few of the changes we at Ink & Associatez (virtual accountants) recommend.


Currently, in the Jamaican landscape, getting a loan moratorium in times of hardship is at the discretion of each bank - this became very evident with COVID-19. We saw where a company with two loans from two different notable banks was granted three months’ moratorium of interest and principal from one bank, while the other bank continues to charge interest and principal on the loan throughout COVID-19.

As a consultant, I would generally advise my clients to form a relationship with the bank that granted the moratorium, as that institution understands your business and gives you a waiver in time of need. But this should not be an added factor to determine which institution to select. It should be mandatory that SMEs are granted moratorium in some form, which automatically kicks in, in times of need. However, this is not the case. As such, we advise SMEs that in negotiating new loan agreements, there should be a section (clause) that speaks to moratoriums in instances of a disaster, which includes a virus outbreak.


Many sectors were affected by COVID-19, but one specific industry that I want to highlight is the restaurant business. With COVID-19 creating havoc, the service sector (the exception being shops and supermarkets) was hit hardest. The restaurant industry is a part of this sector that faces numerous challenges, whether it’s through total shutdown or shorter opening hours.

These changes had, and continue to have, an adverse effect on business revenues, and we see where many of our clients in this sector (the restaurant industry) see their revenue drop between 50 per cent-100 per cent.

We understand that some businesses have closed shop, and some may permanently close after COVID-19. But for those that have been resilient and managed to stay open, and new restaurants that will open, we advise that they revisit their business models.

Resulting from this experience and the challenges of COVID-19, businesses (not only in the restaurant industry) need to ensure they are making adjustments to their models to determine how to operate when there’s a virus outbreak. Additionally, for new businesses, we are encouraging persons to have a section in their planning and operating manuals that not only looks at operating in a perfect world, but how to operate in a distressed environment, similar to that of COVID-19.


SMEs are said to be the pillar of every economy. While we believe the Government made strides in helping persons who were laid off from employment, there is no evidence of direct assistance to keep SMEs open and operating post COVID-19.

We had the opportunity to inspect how other countries operated in COVID-19. Canada is one such country, and while we’re aware that there’s a vast difference in Canada’s resources versus a small island like Jamaica, we can compare and see how Jamaica could have done it on a smaller scale.

In addition to helping persons that were laid off, Canada went a little further and helped businesses remain open and kept their employees on the payroll. This was done with a stimulus package to businesses amounting to 75 per cent of their payroll cost. It is still early days; hence, it’s not clear what effect this stimulus package will have on the Canadian economy.

However, critically thinking, we can see Canada’s objective, as such stimulus packages were aimed at lessening persons applying for laid-off benefits and also boost production as best as possible in these adverse times, and thus jump-start the Canadian economy when some form of normality returns.


With businesses in Jamaica reopening, it’s inevitable that some SMEs will remain closed as they were not able to weather the impact of COVID-19. However, post COVID-19 it cannot be business as usual. SMEs must adapt to these changes and make their business more robust and ready; should another pandemic or some other localised disruptor occur. For these factors that are outside the control of SMEs, the Government of Jamaica should assist in ensuring these pillars remain standing.

Herms Stanley is a chartered accountant.