Do you still find yourself asking how all this even happened? Well, you’re not alone.

The novel coronavirus COVID-19 came almost out of nowhere, bringing the global economy to its knees in a matter of weeks. After the initial shock, many business owners are looking beyond the virus to its long-term effects.

The reality is that those long-term effects may be huge.

Here are the global business implications of COVID-19 and what it could all mean.

Culture Shock

No matter what country you live in, you’ve probably already seen a massive shutdown of non-essential services. In consumer-heavy cultures like developed Western nations, that includes an enormous percentage of the business sector.

Thousands of businesses have already had to shut their doors. A shrinking workforce and the total absence of customers have destroyed their viability overnight. That’s even leaving aside government-mandated shutdowns. The initial business impact of COVID-19 has been almost immediate.

The Long Haul

Some businesses are in a better position. With their own savings, loans, or government support, they’ll be able to weather at least a few months.

Yet there’s no real end in sight for COVID-19’s social impact. So far, lockdowns have been on the order of weeks and often extended. Social distancing will likely remain in place, in some form, for the rest of the year, at least.

Businesses can’t hold out forever. As the weeks go on, more businesses will have to shut not just their literal doors, but their metaphorical ones, too.

Fall of the Giants

It’s unprecedented to see so many large industries dry up almost overnight. Billion-dollar businesses like airlines and hotels have hit a level of financial uncertainty they couldn’t have imagined just half a year ago.

In the long-term, this could mean the complete dissolution of many big names. In turn, this will have a trickle-down effect, impacting mid-sized and small adjacent businesses.

Without government help, we could emerge on the other side of COVID-19 having to build enormous industries from scratch. Along the way, we’ll have lost expertise, technology, and existing assets.

Meanwhile, governments may have to step in with emergency funding. Yet in the long-term, governments will need to reduce debt and recoup spending. This likely means that businesses could end up with less support when things are back to “normal.”

The Silent Consumer

Many modern businesses owe their very existence to extensive consumer culture. They’re built on the idea that there are millions of people out there looking for luxuries and indulgences to add to their lives.

Yet COVID-19 has left thousands unemployed already. There’s no resumption of normality in sight, either. Together, this means we’re about to see a severe check on consumer culture. Consumer spending will limit itself to essentials as consumers both remain home and try to save what cash they still have coming in.

In other words, a business can do everything right and still fail if the customers just aren’t there.

Supply and Demand

The longer major industries remain shutdown, the slower recovery will be. The compartmentalization of modern supply chains means that a shutdown in one country can have lasting knock-on effects in another.

For instance, take your average cell phone. If its component parts are made in China, then a Chinese shutdown has as much effect on the assembly process as a shutdown at the terminus of the supply line where the goods are packaged and sold.

Over time, this will create enormous backlogs. Supply lines will run with huge delays as they attempt to bring products back to the expected levels of production. Supply lines will also remain uneven as countries come back online out of sync with each other.

Aftershock

We’ll be feeling the business impact of COVID-19 for a long time. The economic impact is already larger than 2008’s financial collapse, which means it will likely take at least that long for the economy to recover.

Initially, there may be an economic upswell as consumers get back to work and celebrate the end of a restricted society. However, most people will be worse off for having endured 2020, leaving consumers with less disposable income.

Businesses could see a long-term downward revision in projected consumer spending. Just as the last of 2008’s aftershocks disappears in the rearview mirror, we’ll have a whole host of new ones.

The specter of global recession is unavoidable. It will take a small economic miracle to avoid something worse than the 2008 recession, and a big one to bring us back to normal within a few years. The marketplace will have undergone a near-complete reset with so many businesses forced to close for good.

Like the aftermath of a forest fire, this could be a time for new businesses to bloom. The overall cost, however, will have been great.

Fate of the Virus

Of course, the biggest wildcard in this whole outlook is the course of the virus itself. We have no idea how effective attempts to control COVID-19 will be in the long-term or how long it will take to produce a vaccine.

In a best-case scenario, recovered COVID-19 patients will have a natural immunity to the virus. Over time, this will limit its spread via herd immunity until a vaccine can be developed to fully control and eliminate the spread. There’s also the possibility that COVID-19 will burn itself out to some extent.

A less favorable outlook sees COVID-19 becoming rampant again the moment lockdown procedures and social distancing come to an end.

Somewhere between the two is the possibility that COVID-19 will continue to move in waves around the world, or operate as a seasonal threat.

Whatever the case, businesses will be forced to respond appropriately. There could be another full shut down almost as soon as we resume normal operation. There could be another in the winter of 2020, or into 2021.

In other words, the virus itself leads to economic uncertainty — which is not a favorable climate for businesses to operate in.

The Overwhelming Business Implications of COVID-19

There’s no escaping it: the business implications of COVID-19 are colossal. They’re unprecedented, global, and sudden. Nobody alive today has had to deal with an economic shock like this, so there’s no telling just how far-reaching these implications will be.

Businesses should do everything possible to protect themselves and buckle up for some difficult times. Preparation will be key to riding out the storm.

Good luck, stay safe, stay health, and stay home!