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With businesses shrinking, India’s solopreneurs face new challenges in the COVID era

The pandemic has hit the unorganised sector especially hard. To change the status quo, the solopreneur needs to embrace technology and go digital.

With businesses shrinking, India’s solopreneurs face new challenges in the COVID era

Friday September 25, 2020 , 5 min Read

With the economy facing headwinds from Covid-19-dictated lockdowns and the widespread economic paralysis, large and established businesses as well as small ones have been severely hit. The difference, however, has been in the intensity of the damage and the differential ability of each to absorb the blow.


While large enterprises in the formal sector typically have sufficient reserves to soften the impact, the small businesses and more particularly, our solopreneurs running one-man-businesses, whether in formal or informal sectors, are left to fend for themselves.


Despite the easing of lockdown and the attempted revival of the larger economy, these solopreneurs are everyday confronted with new challenges.


While each solopreneur would have their own demons to deal with, there are certain challenges common to all. What are those challenges and how should one go about addressing them?




Plummeting demand and incomes

Nonetheless, the biggest challenge for solopreneurs in Covid times is that because most of them are essentially subsistence workers with their cash flows being conditional on everyday sales, any disruption in their expected business cycle becomes a matter of survival not only for their businesses but for themselves and their families.


Those roadside tea and pakoda sellers, the neighbourhood small grocery shop, the tailoring & stitching masters, the cobblers, the masons, etc. are some of those many solopreneurs who have lost their source of everyday income.


Experts estimate that of the 50% of our self-employed workforce, almost 95% belong to the informal unorganised sector, people who may not have savings to fall back upon.


Even among the somewhat high income solopreneurs including professionals such as consultants, social media managers, graphic designers, scriptwriters and stand-up artists, it has been a downward spiral, although relatively speaking, not as badly affected as the former kind.


The second big challenge and that flows from the first is the fall or the absolute lack of demand for their product or service. With social distancing norms restricting outdoor activity, not only are they hindered from hawking their wares, their potential patrons and buyers have been subjected to the same restrictive rules. This particularly applies to those product and service categories which fall under non-essentials.

Inability to scale up businesses

The third challenge especially for those solopreneurs who have somehow managed to stay afloat through the crisis has been to raise their profit and income.


Given the lull in demand as well as their own very limited scale of operation, there are no substantial savings which they could deploy to scale up their businesses.


For those whose products/services are in demand, the lack of access to timely and inexpensive credit pulls them back from growing further. As a result, they continue to remain in the subsistence category of self-employed workers.


In fact, even before the outbreak of Covid-19, economic experts had lamented the low-income generating capacity of the self-employment sector of the Indian economy and underlined the need to bring down the proportion of self-employment in the larger economy.


The Periodic Labour Force Survey (PLFS) 2017-18 which has collected earnings data for self-employed for the first time has estimated that the monthly earnings of self-employed worker has been less than regular workers. With Covid-19, many have been dealt a coup de grace of sorts.  

Supply shortages and digital shock

The fourth challenge is in particular for those who have survived or overcome the lack/fall in demand hurdle; it is the unreliable flow of raw material supplies. Even as the lockdown is being relaxed, supplies of components and parts are leading to shortages due to financial or other constraints of the input-maker.


The fifth challenge has been in terms of absorbing the shock of digital disruption. Until Covid-19, many solopreneurs (especially in smaller towns and rural areas) were ensconced in their own regular offline mode of sourcing, production, sales and marketing without an iota of digital work practice. The sudden online turn by everyone ranging from input material providers to end consumers has caught many of them off-guard.


The suddenness of it all has been too much to handle even for those using mobile phones. The fact that a typical solopreneur handles everything end-to-end all by himself has made it even more onerous for him.                         




What is the way forward for our solopreneurs?

Dealing with change is always a challenge for businesses.


Solopreneurs dealing with the sudden business shift have to tighten their belts and face these challenges head-on. If you cannot change the status quo to your advantage, adapt to the new environment.


If there is a lack of demand for your product, consider pivoting to a new product. Thanks to Covid-19, a vast health and hygiene products and services ecosystem looms on the horizon, something which must give food for thought for solopreneurs.


Even if you are digitally illiterate, go digital today, not tomorrow. It can be done incrementally. If you have been using a feature phone, switch to a smartphone; if you have been using a smartphone, get a laptop with internet access; if you have been on internet before, get onto social media.


Learn digital marketing and sales. A series of free of cost courses online can help you upskill yourself for the new normal. The operative word is: upgrade.


Naturally, the government has a pivotal role to play in all of this. Besides handholding them through policy, credit, tax, market access support and even one-time emergency aid through Covid-19, an extensive digital training campaign must be conducted country-wide.


At the same time, the government must revive the larger economy and generate demand through fiscal and monetary measures. Generating high consumption demand in the formal sector also has a positive spillover effect on the informal sector within which the majority of self-run businesses lie.


Remember Covid-19 is a test. The pandemic will pass. When you have mustered the courage to start and run something on your own, standing through these testing times is just testimony to your spirit of a true solopreneur.  

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)