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Impact of COVID-19 on the Small and Medium Business in the UK

Table of Contents

CHAPTER 4 ANALYSIS..........................................................................................................1

4.1 Introduction.................................................................................................................1

4.2 Findings and Analysis.................................................................................................2

4.2.1 Descriptive Statistics............................................................................................2

4.2.2 Regression Model.................................................................................................3

4.2.3 ANOVA Table.....................................................................................................4

4.3 Discussion....................................................................................................................5

4.4 Chapter Summary........................................................................................................7

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CHAPTER 4 ANALYSIS

4.1 Introduction

This chapter includes the data analysis, results and findings that is are analyzed on the basis
of the research questions and research objective of the study. The data analysis includes
various statistical analysis to analyze the impact of COVID-19 pandemic on the performance
of small businesses in United Kingdom. These quantitative research approaches as the
statistical analysis includes descriptive statistics, regression model analysis, correlation model
analysis and the ANOVA model analysis, as well as it is analyzed using qualitative research
approach as graphical representations and comparison of with the previous studies (Beraha &
Đuričin, 2020).
Furthermore, the effectiveness of the qualitative research approach in this study is evaluated
through the literature review, whereas the effectiveness of the quantitative research approach
is analyzed using the statistical analysis, such as descriptive statistics, regression statistics,
correlation analyses, ANOVA models, and graphical representations of the results (Flynn et
al., 2020). A descriptive statistic averages and standardizes variables, and calculates variance.
Statistics that describe variables are called descriptive statistics. In addition to mean, median,
standard deviation, sample variance, kurtosis, sskewness, range, and minimum and maximum
values, this data contains mean, median, standard deviation, and sample variance. In addition
to analyzing the relationship between the impact of COVID-19 pandemic and the
performance of small businesses in United Kingdom (Albonico, Mladenov & Sharma, 2020).
According to the correlation model analysis, the variables have a positive or negative
correlation. Correlation models also specify whether variables are strongly, weakly, or
moderately correlated in addition to their degree of correlation.

4.2 Findings and Analysis

4.2.1 Descriptive Statistics

The purpose of descriptive statistics is to provide brief informational coefficients about the
given data set of financial information of equity returns, which could be a representative
sample from the population or a representative representation of the entire population that are
equity returns (Shafi, Liu & Ren, 2020). The measures of central tendency and the measures
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of variability are the two categories of descriptive statistics. The descriptive statistics include
the mean, median, kurtosis, skewness, and many other measures to analyze the data.

Table 1: Descriptive Statistics (SPSS Output)

Std.
N Minimum Maximum Mean Deviation Skewness

Std.
Statistic Statistic Statistic Statistic Statistic Statistic Error

E1 60 1516.00 3430.64 2.1233E3 503.04809 .954 .309

E2 60 828.21 3101.01 1.7626E3 612.73673 .744 .309
E3 60 5384.66 15505.00 9.0562E3 3061.54755 .759 .309
E4 60 1455.55 6114.26 2.6741E3 1347.98310 1.484 .309
E5 60 1667.07 3117.17 2.2896E3 337.23475 .317 .309
E6 60 22.47 61.37 40.5957 10.70616 .189 .309
E7 60 322.02 737.28 4.8362E2 105.21187 .173 .309
E8 60 1413.07 4077.12 2.6593E3 816.59707 -.107 .309
E9 60 210.10 419.99 3.5226E2 52.81290 -1.061 .309
E 10 60 364.72 555.17 4.7425E2 45.77384 -.254 .309
Valid N
60
(listwise)

The above data indicates that summary statistics of 10 small businesses indicating as E1 to
E10. The mean indicates the average equity returns of the SMALL AND MEDIUM
BUSINESSES during COVID-19 pandemic crisis, whereas the maximum is the maximum
equity returns of equity returns and minimum is the least equity returns of small and medium
businesses in United Kingdom.
4.2.2 Regression Model

In a regression model, an independent variable such as the equity returns are related to
dependent variables, which can be measured. The overall regression model includes the
model summary, coefficients of the regression equation and regression analysis (Albonico,
Mladenov & Sharma, 2020).
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Table 2: Regression Model (SPSS Output)

Model Summary

Std. Error of the

Model R R Square Adjusted R Square Estimate

1 .991a .982 .978 78.98095

The model summary shows the R, which is 0.991 and R Square as 0.982, whereas the
adjusted R Square is 0.978. The standard error of the estimate for the regression equation is
78.98.
Table 3: Regression Coefficients (SPSS Output)
Coefficientsa

Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 42630.923 250.942 169.883 .000

E1 .095 .088 .090 1.084 .284

E2 .296 .068 .341 4.350 .000

E3 -.011 .009 -.063 -1.279 .207

E4 .067 .040 .169 1.681 .099

E5 .014 .063 .009 .230 .819

E6 17.283 4.308 .348 4.012 .000

E7 .221 .270 .044 .821 .416

E8 .060 .042 .093 1.424 .161

E9 -2.224 .567 -.221 -3.920 .000

E 10 -.043 .376 -.004 -.115 .909

The regression coefficients indicate the dependency of COVID-19 on the independent

variable, that is, the financial performance of the small and medium businesses in United
Kingdom. The variables as E 1, E 2, E 3, E 4, E 5, E 6, E 7, E 8, E 9, and E 10 are the equity
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returns of the ten random small and medium businesses in United Kingdom. The B indicates
the beta coefficient for the repression equation for each small business as well as the alpha
coefficient for the impact of COVID-19 pandemic of the enterprises. The standard error
indicates the error between the dependent variables and independent variables. The t-statistic
is the value that shows the test statistics of the regression model, and the significance value
indicates the significance of the model with respect to COVID-19 pandemic and its impact on
small businesses in United Kingdom.
The regression equation of the study using the formula as y = a + b x is as follow;
y = constant + equity returns χ
y=α+βχ
y = 42630.923 + [(0.095 χ) + (0.296 χ) + (-0.011 χ) + (0.067 χ) + (0.014 χ) + (17.28 χ)
+ (0.221 χ) + (0.060 χ) + (-2.22 χ) + (-0.043 χ)]
y = 42630.92 + 15.76 χ

4.2.3 ANOVA Table

The ANOVA model is an analysis of variance model that is used when there are multiple data
points in a group, such as the ten random United Kingdom enterprises that are selected in this
study to analyze the impact of COVID-19 pandemic on the small businesses in United
Kingdom (Markovic et al., 2021). In the ANOVA model, a common mean value is specified
for a group of observations in a one-way model. The one-way model is analyzed using the
analysis of variance (Flynn et al., 2020). The table below indicates the ANOVA model;

Table 4: ANOVA Model (SPSS Output Result)

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 1.637E7 10 1636843.142 262.399 .000a

Residual 305661.512 49 6237.990

Total 1.667E7 59

4.3 Discussion

The study found an interrelationship between the COVID-19 pandemic and the performance
of small businesses in United Kingdom. According to the findings and results indicated
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above, the equity returns of small businesses have decreased in United Kingdom over the
time period of COVID-19 pandemic from 2019 to 2021 years. Small and medium businesses
in United Kingdom have a direct and positive relationship between their financial
performance (Albonico, Mladenov & Sharma, 2020).
The regression coefficients and significance of ANOVA analysis with a 2-tailed test indicate
that there is a significant association between COVID-19 pandemic and the financial
performance of small businesses in United Kingdom (Flynn et al., 2020). The COVID-19
pandemic crisis and small and medium businesses' financial performance are positively
correlated in United Kingdom. Furthermore, both variables are significantly correlated (Shafi,
Liu & Ren, 2020). In addition, the regression analysis and ANOVA model show a significant
relationship between COVID-19 pandemic crisis and the financial performance of small and
medium businesses in United Kingdom (Flynn et al., 2020). Further, based on the results of
regression analysis, there is a significant relationship between the small businesses in United
Kingdom and their financial performance during the COVID-19 pandemic crisis. It is
therefore concluded that COVID-19 pandemic crisis positively impacts the financial
performance of small and medium businesses in United Kingdom and that there is a
significant link between COVID-19 pandemic crisis and the performance of small businesses
or enterprises in United Kingdom (Markovic et al., 2021).

Graph 1: Performance of Small and medium businesses in United Kingdom during COVID-
19 Pandemic (Source: FTSE 100)

Performance of Small and medium businesses in United Kingdom dur-

ing COVID-19
10000.00
9000.00
8000.00
7000.00
6000.00
5000.00
4000.00
3000.00
2000.00
1000.00
0.00
E1 E2 E3 E4 E5 E6 E7 E8 E9 E10

The above graph indicates that the performance of small businesses in United Kingdom
before and during COVID-19 pandemic. The decreasing trend of the graph shows that during
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the COVID-19 pandemic, the small businesses in United Kingdom falls in their performance,
except the one small business (Beraha & Đuričin, 2020). Overall, the COVID-19 pandemic
has highly impacted the small businesses in United Kingdom.
According to the Markovic et al., (2021) the operations and the financial performances of
small business in United Kingdom impacted during the outbreak. The percentage noted as 78
percent small businesses are impacted due to the COVID-19 pandemic. The small businesses
operating in the United Kingdom have been affected significantly by the COVID-19 outbreak
as expected. In the study, 95.62 percent of enterprises reported a coronavirus outbreak or a
lockdown has affected their business in some way, 3.81 percent expressed no impact, and
3.01 percent were unsure. COVID-19 outbreaks or lockdowns that was either unsure or did
not affect enterprises' businesses were excluded from further analysis (Flynn et al., 2020;
Markovic et al., 2021). 
The COVID-19 pandemic crisis has severely affected most small businesses. A majority of
small businesses are experiencing a severe impact on their business, with more than 41
percent expressing this (Beraha & Đuričin, 2020). There are many types of effects on small
businesses, including different impacts of COVID-19 pandemic. This includes 10 percent
financial issues for small businesses, 21.78 percent disruptions in supply chains, 20.74
percent decreases in demand, and 28.87 percent and 18.53 percent respectively reductions in
sales and profit for small businesses (Shafi, Liu & Ren, 2020), as indicated in the graph
below;
Graph 2: Issues in Small Businesses in United Kingdom during the COVID-19 Pandemic
Crisis (Source: Shafi, Liu & Ren, 2020)

Impact of COVID-19 Pandemic Crisis on Small Businesses

Reduction in Profits

Reduction in Sales

Decrease in demand

Disruptions in Supply Chains

Financial Issues

0% 5% 10% 15% 20% 25% 30% 35%

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The small businesses have been hit especially hard by the impact of COVID-19 due to their
higher likelihood of operating in industries that suffer from cash flow reductions such as
food, accommodation, arts, and construction (Flynn et al., 2020). A majority of businesses in
logistics, construction, and agriculture reported large revenue reductions during the period of
COVID-19 pandemic crisis, while the hospitality sector recorded practically no output.
According to the study conducted by Markovic et al., (2021) the three-fourths of businesses
in the accommodation and food service industry were not confident their firm would survive
three months from now. Moreover, the fact that small businesses are less resilient than larger
companies further exacerbate the impact of the crisis. It is undeniable that the Coronavirus
pandemic has harmed small and medium businesses economically and functionally, yet it has
also provided a boost to business and provided new opportunities for those who survive
(Beraha & Đuričin, 2020). 
According to the study conducted by Albonico, Mladenov & Sharma (2020) and Shafi, Liu &
Ren (2020) the COVID-19 pandemic crisis in United Kingdom has impacted many small
businesses, and as results of this outbreak, many small businesses are financially
vulnerable. In addition, a decrease in demand may be caused by the loss of customers or
buyers. In addition to financial and supply chain disruptions, these results suggest that small
businesses are vulnerable to demand constraints.

4.4 Chapter Summary

The chapter includes the data analysis, results and findings of the impact of COVID-19
pandemic crisis on the small businesses in United Kingdom. In this chapter, the COVID-19
pandemic crisis and the performance of small businesses in United Kingdom are testing using
quantitative research approach as well as qualitative research approach. The findings of the
study indicates that the equity returns of small businesses is decreased in United Kingdom
over the time period of COVID-19 pandemic from 2019 to 2021 years. Further, the small and
medium businesses in United Kingdom have a direct and positive relationship between their
financial performance. The COVID-19 pandemic crisis and small and medium businesses'
financial performance are positively correlated in United Kingdom. There is a significant
relationship between COVID-19 pandemic crisis and the financial performance of small and
medium businesses in United Kingdom, as well as the COVID-19 pandemic crisis positively
impacts the financial performance of small and medium businesses in United Kingdom.
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References

Albonico, M., Mladenov, Z., & Sharma, R. (2020). How the COVID-19 crisis is affecting
UK small and medium-size enterprises. McKinsey & Company.

Beraha, I., & Đuričin, S. (2020). The impact of COVID-19 crisis on medium-sized
enterprises in Serbia. Economic Analysis, 53(1), 14-27.

Flynn, D., Moloney, E., Bhattarai, N., Scott, J., Breckons, M., Avery, L., & Moy, N. (2020).
COVID-19 pandemic in the United Kingdom. Health Policy and Technology, 9(4),
673-691.

Markovic, S., Koporcic, N., Arslanagic-Kalajdzic, M., Kadic-Maglajlic, S., Bagherzadeh, M.,
& Islam, N. (2021). Business-to-business open innovation: COVID-19 lessons for
small and medium-sized enterprises from emerging markets. Technological
Forecasting and Social Change, 170, 120883.

Shafi, M., Liu, J., & Ren, W. (2020). Impact of COVID-19 pandemic on micro, small, and
medium-sized Enterprises operating in Pakistan. Research in Globalization, 2,
100018.