Microenterprises Shutdown Amidst COVID-19 Pandemic: A Focus on Determinants and Exit Strategies

The world economy was severely affected by the COVID-19 pandemic. Maintaining operations during a crisis was extremely difficult for the enterprises. Entrepreneurs who do not have crisis management strategies in place risk having their businesses shutdown unexpectedly. Hence, the researchers aimed to understand and analyze the determinants of microenterprises’ shutdown and exit strategies during the pandemic. This study utilized a descriptive research design, and registered microenterprises were purposively selected in the areas of Cavite. The findings of the study revealed that the majority of the microenterprises were sole proprietors that had been in operation for 2 to 5 years and had a capitalization of less than Php 500,000.00. Consequently, the respondents' most common problems in managing the enterprise were limitations on direct marketing which also involved bill payments, adoption of an online platform, and work-from-home setup. Most of the determinants of problems that led to business failure during the pandemic were obstacles in the realignment of their respective goals owing to the pandemic, their ability to pay operational expenses, difficulties in product innovation, and their failure to react to the changes in the business environment. Exit strategies used by microenterprises included declaring bankruptcy, refinancing, and selling the business to family or friends. Finally, the researchers recommended crisis-sensitive interventions among the microentrepreneurs which involve government provisions of financial safety nets, retooling, and training of pandemic-sensitive enterprise strategies for microentrepreneurs.