Crisis Management for Small Business during the COVID-19 Outbreak:Survival, Resilience and Renewal Strategies of Firms in Macau

We know that small businesses are vulnerable to crisis, however little is still known about how they cope during long crisis as the COVID-19 pandemic. This paper provides a qualitative analysis of small businesses in Macau, China, in the months following the outbreak. We collected interview data from six local small �rms. We found that the sudden decline in demand has the strongest impact on small �rms. As compared with large �rms, new startups and small �rms show high �exibility in their reactions to the crisis, partly due to the low level of bureaucracy and limited social responsibility compliance. Among the various types of response strategies, all participant �rms adopted �exible HR strategies. Other common survival strategies include the increase of product diversi�cation, exploration of new markets, and increase of learning. We also found that some small businesses had a formal crisis plan and strategy before the outbreak, and these �rms tend to have longer history, experience in dealing with crisis, and operate in more regulated sectors. Based on these results, we de�ne �ve types of renewal and survival strategies for small businesses and propose a SME crisis resilience model. and on crisis within a limited geographical area. Considering the unique characteristics of the COVID-19 outbreak, its long period, pervasiveness, and cross-border impact, it is likely that there will be a wide range of crisis strategies. Our study contributes to crisis management literature of small businesses. The primary purpose of this study is to �nd out how small �rms cope with the COVID-19 outbreak. In speci�c, we are interested in understanding the economic impact of the outbreak on small �rms, how SME managers prepare to handle the crisis over an extended period, whether they have a formal crisis management plan, what type of survival strategies were adopted after the outbreak, and whether these strategies vary according to size of the �rm. crisis and also suggests recommendations for policy makers. In this study, we de�ned survival strategies for small �rms in �ve areas: operations, �nancial, human resources, products, and network. We also propose a resilience model for local small businesses consisting of �ve constructs: customer relations, products, �nancial, dynamic learning, and hardware. The difference between our models and those proposed by other researchers in previous crises suggests that survival and resilience strategies may depend on context, time, and coverage of the crisis. Our research �ndings contribute to the current literature on crisis


Introduction
A crisis refers to "a sudden and unexpected event that threatens to disrupt an organization's operations and poses both a nancial and a reputational threat" (Coombs, 2007:163). Early work on crisis management indicates that a sudden and unexpected event threatens business goals and exert stress on management to take prompt action to respond (Hermann 1963). At the rm level, the core of crisis management is to develop strategies that minimize economic loss and increase resilience through a crisis event. Existing literature on crisis management mostly targets large rms with less attention on small and medium size enterprises (Herbane, 2013). Small rms, due to resource constraints, weaker market positioning, and other factors, may be more vulnerable to crisis events. However, SMEs may have advantages as exibility, learning capabilities, innovation, customer relations (Herbane, 2010(Herbane, , 2013Hong & Li, 2012;Irvine & Anderson, 2006).
The Covid-19 crisis manifested in China in December 2019 and soon after became a global pandemic. As of May 26, 2020, 213 countries were affected, a total of 5,591,677 people infected, 347,944 deaths, and Crisis Planning, Diagnosis, and Response SMEs should establish a crisis plan in the good days. Irvine & Anderson (2006) and Munoz et al. (2019) also found that small rms with proper crisis planning survive and recover better from crises events. Ferris et al. (2007) and Maniero & Gibson (2003) concluded that HR should be responsible for coming up with a crisis plan, involving various organizational levels, and guarantee its timely dissemination. Ruff and Aziz (2003) stated that SMEs should have a crisis management team involving staff from various elds and even outside crisis specialists.
Researchers concluded that having a crisis warning system is crucial to survival from crisis events. Kurschus et al. (2015) suggested that SMEs need to adopt a comprehensive crisis warning system that fully considers both nancial and non-nancial factors. The authors also proposed a stakeholder perspective of crisis diagnosis to identify a possible crisis at an early stage. Liu (2013) studied the feasibility of constructing a crisis-based early warning intelligence system.
Leadership and HR are critical during crisis events (Tannenbaum & Schmidt, 1957;Perkings & Murphy, 2013;Edmond et al., 2014;Xu, 2013;Guo, 2018;Cheng, 2018). Losing critical employees during crises can be disastrous (Hao, Zhang & Shang, 2010). Dent & Cudworth (2018) identi ed the effectiveness of leadership and decision-making and the effectiveness of teamwork as the top two challenges to effective crisis response. SMEs should provide proper training for managers on crisis stress management (Ferris et al., 2007;Maniero & Gibson, 2003) and resolving con icts in the workplace. Timely communication at the management level is essential during crises. Tang (2018) and Nong (2018) found that social media is widely used as a channel for effective crisis communications by professionals and management.
Finally, robustness and exibility are highly demanding when managing transboundary crises. Firms need to rapidly customize their strategies and timely reorganize their courses of action (Ansell et al., 2010). Figure 1 summarizes the crisis management strategies for SMEs from the literature reviewed.

Resilience, Dynamic Learning and Strategic Renewal for SMEs
Some companies recover from crises, and others do not. McConnell (2011) stated that recovery from crises is never entire and complete, particularly in SMEs due to their resource constraints and relatively weak market positions (Hong & Li, 2012;Corey & Deitch, 2011).
During challenging times, new startup rms have a high chance of surviving during crisis periods than during the growth period, likely due to the lack of job opportunities (Simon-Moya et al., 2016).
Entrepreneurship activities could offset the negative impacts of crises by maintaining the ow of goods and services and restoring public con dence of other business owners and the community at large (Doern et al., 2019;Szabo, 2011;Herbane, 2010;Chamlee-Wright & Storr, 2008). Kuckertz et al. (2020) identi ed that entrepreneurs pursued new opportunities and established new directions for their rms during crises. Bishop (2019) proposed that a diverse and robust knowledge stock would foster entrepreneurship after crises events.
Despite their inherent limitation, SMEs display resilient market responsiveness. Latham & Braun (2011) proposed that a rm's response strategies and repositioning efforts will de ne its long-term postrecession performance. Resilience strategies require possessing a leadership mindset, adopting multiple crisis management practices, maintaining a good relationship and robust network, identifying threats and opportunities, and taking actions promptly and exibly (Hong & Li, 2010;Cosh et al., 2009;Irvine & Anderson, 2004;Irvine & Anderson, 2006;Simon-Moya et al., 2016;Phillipson et al., 2004).
As opposed to the traditional view that rms are highly subject to nancial constraints during crises, Cosh et al. (2009) concluded that SMEs do not nd additional di culties in seeking nancial support during crises. However, instead, they suffer more from demand constraints (loss of customer/market). Given this, the aftermath strategies should focus on how to increase demand. SMEs can use network communication platforms such as Facebook and Weibo to explore new business opportunities after crisis events (Nong, 2018).
Post-crisis organizational learning capability is also critical to recovery. SMEs with strong dynamic and innovative capabilities and are willing to learn from crises events recover quickly (Boin, 2008;Eillott, 2009;Elliott & MacPherson, 2010;Saunders et al., 2014). Similar ndings were obtained by Bullough & Renko (2018), who stated that entrepreneurs should engage in business development training and seek networking events or special lectures to learn by modeling others who have survived through challenging times. Latham & Braun (2011) also proposed that rms' abilities to withstand recession will in uence their ability to navigate subsequent recessions, another signal that rms are learning from previous crises. Learning can be done in an informal way through networking, mentoring, or coaching (Saunders et al., 2014), which can signi cantly lower the costs involved. Figure 2 summarizes the resilience, dynamic learning, and renewal strategies adopted by SMEs from the literature reviewed.

Contribution and Questions
The literature review suggests that research about crisis management has often focused on large rms rather than SMEs and on crisis within a limited geographical area. Considering the unique characteristics of the COVID-19 outbreak, its long period, pervasiveness, and cross-border impact, it is likely that there will be a wide range of crisis strategies. Our study contributes to crisis management literature of small businesses. The primary purpose of this study is to nd out how small rms cope with the COVID-19 outbreak. In speci c, we are interested in understanding the economic impact of the outbreak on small rms, how SME managers prepare to handle the crisis over an extended period, whether they have a formal crisis management plan, what type of survival strategies were adopted after the outbreak, and whether these strategies vary according to size of the rm.

Research Context
The Macau SAR recorded the rst con rmed case on January 22, 2020. As of May 25, the number of con rmed cases accumulated to 45 only. Given the high urban density of Macau and the massive ow of visitors, the government of Macau SAR responded promptly and effectively by adopting a strict quarantine policy to lower the spreading of the virus in the city. The lockdown and social distancing policy has brought the entire city to a standstill.
Epidemics also cause psychological stress in the community and the personnel of SMEs (Leung et al., 2005;Doern, 2016;Ferris et al., 2007). As expected this high level of anxiety can be observed in the recent panic in Mainland China, Hong Kong, Macau, and other regions around the world when supermarkets and pharmacies are ravaged by residents when the deadly virus spreads.
Because of the adverse impacts of the outbreak on the local economy, Macau announced a series of policies in February and April 2020 to provide economic assistance to residents. The cash distribution was released in April. Macau residents received consumer e-vouchers of MOP 8,000 (USD1,000) per person to stimulate local consumption. Other policies included increasing the amount of professional tax refund, exemption of property taxes and electricity bills, raising the deduction limit for income tax, temporary exemption of tourism tax, granting a one-time allowance of MOP15,000 for quali ed employees and MOP15,000-200,000 for quali ed businesses (depending on number of employees).
Additionally, the government also offered loans for SMEs and provided guarantee for bank loans for quali ed SMEs.

Research Design
As our purpose is to understand the challenges, strategies, and perspectives of small-sized enterprises during the COVID-19 crisis, it is necessary to obtain information about thr thoughts and views of SME managers. Thus, a qualitative approach is appropriate and use of case studies will serve our research purpose (Ellram,1996;Yin, 1994;Hong & Li, 2012;Eisenhardt & Graebner, 2007;Eisenhardt & Graebner, 2016).
We have conducted six case studies from various industries in Macau SAR covering hotel and hospitality, wholesale and retail, real estate, private education, professional service, and food and beverage.
Theoretical sampling was adopted. Six cases are chosen based on their ability to illuminate and extend relationships among constructs and develop a deeper understanding of small businesses' reactions in the COVID-19 crisis. The six rms come from different sectors, covering the signi cant industries in Macau. As such, we believe that the sample size is adequate (Eisenhardt, 1989;Eisenhardt & Graebner, 2007;Eisenhardt & Graebner, 2016). We describe below the characteristics of the six rms.
De nitions of SMEs differ widely, most likely due to the size and nature of the respective markets. For example, Hong & Li (2012) de ned SMEs as rms with less than 500 employees and again did not refer to annual revenue, annual pro t, and total assets either. In China, the classi cation of SMEs differs according to annual revenue, the number of personnel, and industry types. In this study, we de ned SME according to the criteria of the Economic Affairs Bureau of Macau, which indicates that SMEs eligible for loan applications need to have less than 100 employees.

Data Collection
We conducted two round of interviews with managers of each the cases. The rst round was arranged from March 8 to April 18, 2020. We conducted in-depth semi-structured interviews via social media (including WeChat, WhatsApp, and Zoom) to avoid face-to-face contact during the COVID-19 outbreak. The interviews lasted 60 minutes of on average, and are recorded and stored in digital format in WeChat or WhatsApp voice clips. As a follow-up measure, we have conducted second interviews of the same six rms from May 10 to May 14, 2020 to learn about ongoing handling of the crisis. The follow-up interviews lasted 15 minutes. We also took written notes during the interviews. The interviews were conducted in Chinese, and the translation into English was done immediately after the interviews. To validate the accuracy of the data, we sent summaries of the interviews to the interviewees for con rmation within three days after the interviews. To increase participation's trust, we promised to send a copy of our paper to all participants. The interview questionnaire is included in appendix. Table 1 matches the interview questions with research objectives.

Validity and Reliability
To ensure the reliability and validity of the study, we considered recommendations proposed by Yin (1994) and Hong & Li (2012). Before formally interviewing the owners of the six rms, we run a pilot interview with the owner of another SMEs on March 5, 2020, to ensure that the questions are clear and without ambiguity. We also carefully took notes and recorded the interviews with the interviewees' consent to ensure the accuracy of the data. For construct validity, we summarized the interviewees' responses and sent them back to the participants for their veri cation after the interviews. To con rm internal validity, we compared the ndings against a prediction made by a group of business practitioners from our social network. We also tried to obtain a heterogeneous group of participants by selecting small rms from various industries with different company sizes to enhance external validity (Yin,1994;Hong & Li, 2012).

Description of Participant Firms
We selected six different small businesses in Macau SAR within the researchers' social and business network (one hotel, one wholesaler and retailer, one real estate agency, one private education institution, one law rm, and one cafeteria). To prevent traceability, the participating rms are identi ed with letters (Firm A, B, C, D, E, and F). Firms were selected based on the following criteria: the organizations are small businesses (with less than 100 employees), have experienced a signi cant impact from the current COVID-19 outbreak; and, are available and willing to participate in this research. The table 2 summarizes the demographic information of the six cases selected.

Data And Results
We adopted the case description strategy and analytic strategies of pattern-matching and explanationbuilding to compare data within cases and across cases (Yin, 1994;Hong & Li, 2012). The interview data was content analyzed. The results provided indication of the main economic impacts, survival and resilience strategies. These ndings were then compared with existing literature. Table 3 provides a summary of crisis management strategies adopted by the six small rms.
Tables 4 and 5 summarize the survival and resilience strategies of the participant rms.

Firm A Wholesale and Retail
Firm A is in the wholesale and retail industry sector and was set up two years ago by two young local entrepreneurs. It sells badminton rackets and supplies, sportswear, and sports equipment. The owner has some previous crisis experience.
During COVID19 crisis, the rm recorded signi cant loss of customers and sales volume due to panic in the community and a massive and temporary shutdown of badminton courts by government order. The owner estimates that the organization's total nancial loss would be around MOP100,000 (USD 12,500).
The rm currently has a crisis management plan and strategy but with narrow focus, mainly due to scarcity of resources and lack of a sense of crisis planning. The rm also has a contingency plan, which includes buying from numerous suppliers and increase product diversi cation.
During the outbreak, the rm reduced operation hours, cut down non-essential operating costs, and reduced inventories. It also boosted promotion on social media and offered an additional 15% discounts during the crisis. The rm is also introducing new sports equipment for home use.
As for resilience strategies, the organization plans to increase promotion on social media, offer discounts, and diversify products. The rm is also considering applying for the new SME loan for the COVID-19 crisis offered by the government of Macau. The signi cant barriers or di culties for recovery may be a lack of cash ow and loss of a customer due to the panic in the community at large.
The rm will also strengthen crisis management as an aftermath strategy. After the COVID-19 crisis, the organization may be willing to invest in learning and training in crisis management, but it is too early to say to what extent there is no exact plan at this stage.
Lastly, the owner mentions that rm size would make a difference in their industry. In general, small rms suffer a smaller economic loss due to low inventory levels, labor costs, and rental burden. Small rms also show higher exibility in making decisions for labor cost cut and price reduction for survival. It is also easier for small rms to adopt resilience strategies such as product diversi cation and relocation of the shop for lower rental after the crisis. These are mainly due to the low bureaucracy in small businesses.
In the follow-up interview, the owner stated that business has gradually recovered after the peak of the outbreak, and as of early May 2020, the rm reached around 70% of the sales revenue before the outbreak. However, the rm is cautious about the future because of the general contraction of consumers in spending on items other than daily necessities as sports equipment.

Firm B Education
Firm B is a private training and education center with a history of 38 years. The rm currently has 12 employees including two foreign workers. The rm reports an annual pro t of higher than MOP 1 million. The owner has extensive crisis experience before COVID-19 outbreak.
During the public health crisis, all education institutions are temporarily shut down by order of the government, leading to lack of revenue for one and half months. The most signi cant impacts are decline of sales, temporary loss of customers due to the shutdown of schools, panic in the community, and loss of staff. The rm expects to record a loss of around MOP350,000. The adverse impact is considered as industry-wide though.
The organization currently has a crisis management plan and strategy as required by the regulatory body. The rm has also appointed a director to be in charge of crisis management. During the public health crisis, top management communicates daily via Zoom, Whatsapp, and WeChat.
The rm will further re ne their existing crisis management plan and strategies afterward. The rm will also increase funding of around MOP10,000 (USD 1,250) annually in training their management team and employees in crisis management after the crisis.
The rm intends to boost revenue by increasing promotions in newspapers and social media. Panic in the community at large may adversely affect customer ow in the upcoming 2 to 3 months. The outbreak has also inspired the management to explore a new market of delivering speci c courses through online channels.
The owner believes that the impacts of COVID-19 are unique and industry-wide. Nevertheless, he thinks that small-sized enterprises may suffer lower economic loss as the xed operating costs are lower than those of larger rms. Small rms may have an advantage in changing their HR policies swiftly during the outbreak to minimize economic loss without getting massive criticism from society. Small rms can also adopt revolutionary resilience strategies such as product diversi cation or industry diversi cation without going through bureaucratic processes.
In the follow-up interview, the owner mentions that business has swiftly recovered, and as of early May 2020, revenue is back to 92% of the revenue before the outbreak. A possible explanation for the prompt recovery is that people are eager to enhance their technical skills during an economic downturn to ensure job security.

Firm C Lodging
Firm C operates a medium-sized hotel in a traditional tourism district in Macau. The hotel has been operating for over 30 years, with an annual pro t above MOP 1 million (USD 125,000). The manager is a second-generation business owner. The rm has 82 employees, and over 70% are foreign workers. The rm has extensive crisis experience.
During the COVID-19 outbreak, the hotel recorded a sudden decrease in the occupancy rate at the beginning of the outbreak which dropped to less than 10%. However, the situation changed in mid-February when the government implemented the quarantine policy and foreign workers who used to commute daily between the Macau-Zhuhai border now needed a place to stay in Macau. As the room rates of the hotel are relatively inexpensive, the occupancy rate has recovered to over 90% within two weeks, which is even better than the situation before the public health crisis. The government policy has unexpectedly played a vital role in the survival and short-term recovery of the hotel. The estimated nancial loss in this COVID-19 crisis amounts to around MOP500,000 (USD 62,500).
The hotel currently has a crisis management plan and strategy. The owners and many staff at various levels are involved in the crisis management procedures. The rm has a well-organized crisis signaling system and a contingency plan, as requested by the regulatory body (Macau Tourism Bureau).
Regarding HR policies, the rm asked employees to clear annual leave and take unpaid leave to reduce payroll costs. The rm also separates front line personnel into two groups to prevent virus contamination. As part of the contingency plan, top management who have to visit Hong Kong for a business trip need to take separate buses to minimize contamination.
For sales and promotion, the hotel reduced room rates by 50% to attract customers during the outbreak.
The hotel is looking for new business opportunities by contacting local companies to determine whether they need to rent rooms for an extended stay and/or relocate their foreign workers from Zhuhai to Macau. To reduce costs and mass gatherings, the restaurants in the hotel reduced operations and only offer breakfast meals. Several maintenance works have been done during the outbreak while the occupancy rate is low, so it did not create too much disturbance to the customers.
Other survival strategies adopted include working closely with business partners such as tourism agencies, customers, and suppliers. The hotel also reduced inventories and negotiated for extended credit periods with a few suppliers.
After the COVID-19 crisis, in order to recover from the crisis, the hotel intends to actively partner with tourism agencies in Macau, Hong Kong, and Mainland China to increase room sales. At the same time, to avoid over-reliance on tourists from Mainland China, the hotel will explore the new market for long-term residence to foreign workers of local companies. As the restaurant continuously records losses, the hotel intends to close down the restaurants except for breakfast. It also plans to increase investment in training for crisis management and stress management, with an estimated annual investment amounting to MOP200,000 (USD25,000). The primary barrier or di culty for recovery is mostly the potential loss of tourist ow (China and international).
The owner believes that the impacts of COVID-19 are industry-wide, and it hit hard on the tourism sector. However, as compared to their peers of larger size, the low room rate policy has helped their hotel to survive through this crisis. Unlike other large-sized international hotels, small rms can swiftly change their HR policies during the outbreak to minimize labor costs without having to comply with social responsibilities that the government prescribed to large enterprises. Small rms also have higher exibility in adopting recovery strategies such as price reduction, product diversi cation, or industry diversi cation due to low levels of bureaucracy.
In the follow-up interview, the owner mentioned that the hotel industry had not recovered yet because of the temporary cancelation of air and sea transportation into and from Macau. The hotel has a competitive advantage by offering rooms at reduced rates for local businesses that need to provide temporary residence for their cross-border personnel even though sales revenue has dropped by 40%.

Firm D Realtor
Firm D is a real estate property agency set up two years ago by a group of young local entrepreneurs. We interviewed its owner, who is also managing director. The rm has seven local employees and no foreign workers. The rm reports an annual pro t of above MOP 1 million (USD 125,000). The rm has no previous crisis experience.
The COVID-19 outbreak has caused a sharp decrease in demand in real estate and the rm experiences a 30% loss of customers. The manager estimates the potential business loss at MOP300,000 (USD37,500).
The existing crisis management mechanism is relatively immature, and the organization currently does not have a crisis management plan and strategy or a contingency plan. Crisis management is mostly on an ad-hoc basis.
The organization responds to the current COVID-19 outbreak by requesting all employees to work at home and canceling all appointments with customers/ homeowners. Employees who have been to Mainland China are required to self-quarantine for 14 days before coming to the o ce.
The organization has no plan to invest in learning and training in crisis management. The director believes that even with a strong crisis management strategy, it probably would not make much difference. He mentioned that if the volume of Chinese visitors does not recover quickly, job security in Macau will suffer and cause a decrease in demand in the housing market. There is not much the rm can do but to rely on the recovery of the local economy.
The owner also believes that as the impacts of COVID-19 is industry-wide and rm size does not make much difference in terms of survival and recovery strategies. However, he admits that small rms may record a smaller economic loss due to low xed operating costs.
As of early May, the company operations are back to normal but with the abrupt decline of the rental market, the sales revenue dropped to 60% of the levels before the outbreak.

Firm E: Professional Service Provider
Firm E is a law rm with ve years of history. The rm has ve local employees and no foreign workers. During the COVID-19 outbreak, the rm closed for one week only and had limited operations for two more weeks. This was necessary due to the postponement of court proceedings, reduced public services, and delayed post o ce deliveries. Our interviewee mentioned that due diligence procedures for civil transactions have been delayed. The rm estimates a nancial loss of 20% of net income in this COVID-19 crisis, yet it expects that the impacts of the outbreak will be short term only. The rm currently has a management contingency plan to prevent the crisis or minimize the negative impacts of the crisis in the HR aspect.
The organization responds to the current COVID-19 outbreak by shortening operation hours and reducing face-to-face meetings. Partners and senior management communicate via Whatsapp and Zoom. The rm also works with its clients to deal with this crisis by giving legal advice on termination of employment and contracts. The owners believe that those actions are useful for survival in this crisis event.
The law rm mainly works on commercial and property transactions, and the partner expects that full recovery will take one year. The rm does not plan to modify its services, operation process, or market position once the COVID-19 outbreak is over. The rm is willing to invest in training and training in crisis management, primarily providing more training to the management level. The rm also intends to strengthen its crisis management strategies. The partner believes that as the business of the law rm depends on the economic environment, any disturbance in the market will damage business. Firm size would not make a big difference in economic impact, survival, and resilience strategies. In the follow up interview in May, we learned that business is almost back to normal, and sales revenue is around 90% of that before the crisis.

Firm F: Cafeteria
Firm F is a cafeteria operating in the central commercial district for four years. The cafeteria has hired 23 employees, and of these 5 are foreign workers. The cafeteria closed down for three weeks during the outbreak. The rm estimates to record a loss of approximately MOP400,000 (USD50,000) during the outbreak, as the rm still needs to pay rent and payroll. They expect that full recovery will take four months. The rm currently has a crisis management plan but mostly focuses on food safety and HR issues. There is a formal documentation mechanism for both nancial and non-nancial factors.
The cafeteria survives through the COVID-19 crisis by shutting down the café and asking employees to clear their annual leaves. Employees who reside in China were asked not to return to their work until April. With these special arrangements in HR policies, the rm has reduced labor costs by 50% during the outbreak. The rm also negotiated with suppliers for an extended credit period. The café also switched to takeaway and delivery during the outbreak. The café is offering the set lunch at a discount price to attract locals who work nearby.
After the crisis, the rm plans to cut down employee size and terminate contract with some of the foreign workers. The café also plans to reform its business model by focusing on the takeaway market and offer discounts. They also partner with Food4U, a local food delivery rm, so that the café does not need to hire personnel to deliver on their own. The café believes that these actions can help to lower labor costs by 20%. The rm is willing to provide training to the managers about crisis management, with an estimated annual investment of MOP20,000 (USD2,500).
The owner believes that COVID-19 has an impact in all industries but the food services is one of the sectors that suffered the most. However, as compared to competitors of larger size, the prompt action of changing their HR policies during the outbreak has signi cantly helped the rm. Small rms may bene t from a low level of bureaucracy in adopting survival strategies.

Main Findings
Economic Impacts and Time All SMEs suffered temporary closedown of the business and HR issues. The participant rms reported economic losses ranging from MOP100,000 to MOP500,000 (USD12,500 to USD62,500). The most signi cant economic impact is the loss of customer ow (demand constraint) instead of cash ow di culty ( nancial constraint). Our research ndings are consistent with Cosh et al. (2009), Phillipson et al. (2009, and Anderson (2004 and2006) indicating that small rms are more vulnerable to decline in demand than nancial constraints.
All participant rms expected the adverse effects would last far beyond the period of the actual COVID-19 crisis, with estimated recovery time ranging from 3 to 36 months. In summary, the data obtained to support that the COVID-19 crisis is unique in terms of its pervasiveness and longevity. The impacts are transboundary, both geographically and cross-industry.

Crisis Management Strategies
From the data obtained, we found that rms B, C, and F have a comprehensive set of crisis management strategies. These are rms that have a long history and larger employee size, with more extensive crisis experience, and subject to more government regulations. The leaders of these rms are often involved in crisis management. These rms also learned from previous crisis and used that experience to develop a crisis management strategy. From the follow-up interviews, we found that these rms show signi cant signs of recovery four months after the outbreak. Regarding the SME rms without a formal crisis plan, they are rms with weaker market position, less resources, and lacking a sense of crisis.
Our ndings are consistent with existing literature such as Anderson (2006), andMunoz et al. (2019), who found that small rms with proper crisis planning survive and recover better from crises events. Nevertheless, no rm indicated to involve an outside crisis expert in the existing crisis mechanism, as suggested by Ruff & Aziz (2003).
However, whether building up a sound system of crisis management can help prevent future crisis events or reduce potential losses in the next crisis is in doubt. Yet small rms with better preparedness may recover sooner from stress. Figure 3 presents a model of the crisis management strategies adopted by the participant SMEs.

Survival Strategies
From the interviewees' responses, we have summarized a ve-categorical model for survival strategies for small businesses. The ve categories are operation, nancial, human resources, products, and network.
All participating rms report using operation strategies (close down or reduce operation hours), HR strategies ( exible HR policy), nancial strategies (cost cut), and network strategies (customer relation) during the COVID-19 outbreak. Four out of six rms have kept timely communication at the management level (HR). Three out of six rms have adopted other survival strategies on the list. The participating rms nd these strategies useful for surviving through the crisis.

Resilience, Dynamic Learning, and Strategic Renewal
From the data collected, we also propose a resilience model for local small rms consisting of ve constructs: customer relations, products, nancial, dynamic learning, and equipment.
Our rst observation is that Firms B and C, with the most extended history and extensive crisis experience, tend to adopt a more comprehensive set of resilience strategies that include all the constructs in our model.
Of the ve constructs, four out of six participating rms have adopted customer relations and products. Small businesses plan to enhance networking with customers, diversify products with the help of technology, and explore new market sectors after the crisis.
We also observe that small rms are learning from the crisis. Four out of six rms report the intention of reforming and strengthening their crisis management plan and strategy. Five rms are willing to invest in learning on crisis management. Two rms plan to reform their existing HR policy. We also nd that Firms B and C, which have adopted comprehensive dynamic learning in their resilience strategies, recover promptly from the crisis. Our ndings are in line with Saunders et al. (2014), Eillot (2009) and Bullough & Renko (2018) who concluded that SMEs with strong dynamic and innovative capabilities and are willing to learn from crises events recover quickly.
Small rms with shorter business history and less crisis experience seem to lack plans of resilience and strategic renewal (as observed in Firms D and E). These owners do not see the relevance of a resilience and renewal strategy as they believe it may not directly re ect short-term nancial performance. Our research ndings are consistent with Latham and Braun (2011). They proposed the rms' initial conditions (resources and capabilities) at the onset of the recession determine rm performance withinrecession and post-recession.
In summary, the time and pervasiveness of the COVID-19 outbreak may have affected the resilience strategies adopted by small rms. We observe a heavy focus on product diversi cation, new market exploration, and dynamic learning in our study as compared with previous research conducted on other crises.

The Impact of Firm Size
New setup rms, especially those founded by young entrepreneurs and of small size, show advantages in terms of exibility and prompt reaction during the COVID-19 outbreak. Five out of six participating rms record smaller economic losses than large rms in the same sector by changing their HR policies and/or reducing prices during the outbreak. Our ndings are consistent with those obtained by Simon-Moya et al.
(2016) and Doern et al. (2019). One possible explanation is that small rms, and new startups have a low degree of bureaucracy (Spillan & Ziemnowicz, 2003;Hong & Li, 2012;Irvine & Anderson, 2004;Irvine & Anderson, 2016). Another difference between small rms and large rms is the invincible pressure of CSR compliance. Existing literature such as Baumann-Pauly et al. (2015), Ketola et al. (2009), Lepoutre & Heene (2006), Udayasankar (2008), Wickert et al. (2016) and Youn at el. (2015) show that CSR strategies and compliance depend on rm size. CSR is a two-sided sword. In the good days, CSR helps promote the rm's image. Yet CSR compliance may set invincible boundaries prohibiting large rms to swiftly and effectively restructure their HR policies to cut down labor costs sharply during crisis. We observe such CSR boundaries in the gaming and hospitality industry when the Macau government interferes and persuades large rms not to terminate employment in the early stage of the outbreak massively.
To summarize, as compared with large rms, new startups and small rms show high exibility in their reactions to the crisis, partly due to the low level of bureaucracy and limited social responsibility compliance.

Policy Making
All rms are satis ed with the existing government policies of handling the COVID-19 crisis. They believe that the initiatives proposed are helpful, which include: offering consumer e-vouchers, select loans to SMEs, and guaranteeing the supply of surgical masks. Regarding nancing, it is noteworthy that three rms (Firms A, C, and D) indicate that loan repayments would exert nancial pressure on the organizations.
The rms suggested that additional government help may include: increasing the value of consumer evouchers, expanding the consumer cash coupon to cover tourists instead of only Macau residents, increasing the value of the continuing education fund from MOP6,000 to MOP10,000, and resuming classes in high schools and tertiary education institutions as early as possible when the outbreak goes down.

Implications for Research
Our study contributes to the existing literature in the crisis management theory by proposing models of survival and resilience strategies for small businesses in a pandemic, such as the COVID-19. Considering the uniqueness of the COVID-19 crisis (long time and world-wide and cross-industry impacts), previous research ndings from other crises events may not apply. The uniqueness of the COVID-19 also provides insights into the classi cation of crises. Traditionally crises are classi ed by their nature (public health, social, economic, etc.). Perhaps it is time to take into account time, pervasiveness, and coverage (both in terms of industry and geography) of the crises when classifying crises as rms may take different actions concerning those new factors. The new classi cation system may impact the way we understand crisis management in small businesses.

Implications for SMEs
Our research ndings suggested that the COVID-19 outbreak widely impacts SMEs. The most signi cant impacts are demand constraints and HR issues. The SMEs being interviewed show exibility in handling crises as small rms have a low degree of bureaucracy, and they are less bound by CSR compliance.
However, we observe a lack of formal documentation mechanisms and comprehensive crisis management and aftermath strategies for new rms with little previous crisis experience. We recommend that small businesses consider long-term and adoptive crisis management strategies, not only focusing on nancial factors but also fully taking non-nancial factors into account. Owners, top management, as well as different levels of personnel, should be involved in developing crisis management mechanisms according to their needs.
All rms show interest in exploring new markets and incorporating technology into their future growth, which is another sign of active learning and improvement from the crisis. In the long run, the urge to grow and expand market share may be a strong driving force for rms to strengthen their resilience and renewal strategies.
We do not observe close cooperation between rms and various stakeholders other than the customers in the survival and recovery plan. Thus, we suggest SMEs work closely with various stakeholders to survive and promptly recover from the crisis (Brunet & Houbaert, 2007).
Among the participant rms, we have not found any rm that has involved external parties in crisis preparations. This limitation suggests a potential disengagement with external stakeholders and the need to develop a broader crisis management plan (Dent & Cudworth, 2018).
It is also unclear whether SMEs are willing to invest additionally in improving crisis management. Even for the rms with such a plan in mind, the estimated amounts of investments appear inadequate. We also recommend learning through informal networking, mentoring, or coaching. SMEs should look for learning tools that are inexpensive, innovative, exible, and useful.

Implications for Policy-Making
All rms show a high degree of satisfaction with the existing governmental policies, especially in terms of controlling the ow of visitors, offering consumer e-vouchers, allowing a special tax reduction, and granting particular loans for SMEs during and after the public health crisis.
It is also vital for the government and non-government to work together to strengthen infrastructure to support local SMEs and create a market of encouraging entrepreneurship, learning, and innovation. As proposed by Bishop (2019), a diverse and robust knowledge stock would foster entrepreneurship after crises events.
We also observe heavy reliance on technology during the crisis, which calls for the government to invest more in improving IT and telecommunication infrastructure and supporting local SMEs to adapt to the change in the environment. At the same time, attention should be paid to protect the users' privacy of online communication tools. With the help of technology, local SMEs are likely to explore new markets out of Macau and nd new business opportunities.
Our research ndings indicate that the local tourist industry is fragile and highly vulnerable to any external shocks such as the recent COVID-19 crisis, which are consistent with the results obtained by Irvine & Anderson (2004), Irvine & Anderson (2006), Jonas et al. (2010) and Wilks (2006). Even worse, the adverse impacts of public health crises on the tourism industry may last for a much longer time than the crisis period (Irvine & Anderson, 2004;Irvine & Anderson, 2006). Thus, Macau, with an economy heavily focused on tourism and peripheral industries, may rethink promoting crisis management for local rms and, in the long run, industry diversi cation.

Conclusion and Limitations
Our research provides insights on how small businesses in Macau respond to the recent COVID-19 crisis and also suggests recommendations for policy makers. In this study, we de ned survival strategies for small rms in ve areas: operations, nancial, human resources, products, and network. We also propose a resilience model for local small businesses consisting of ve constructs: customer relations, products, nancial, dynamic learning, and hardware. The difference between our models and those proposed by other researchers in previous crises suggests that survival and resilience strategies may depend on context, time, and coverage of the crisis. Our research ndings contribute to the current literature on crisis management by providing empirical evidence from small businesses in a resourceful environment during a long-lasting and pervasive pandemic environment.
The outbreak has created a drastic turmoil in local SMEs. Due to the low degree of bureaucracy and small size, SMEs reacted quickly and effectively in the outbreak. Nevertheless, we have identi ed some issues in terms of crisis planning, management, resilience, and renewal. As crisis management is an ongoing process, continuous improvement by embedding lessons learned can minimize the risk of the next crisis.
Local small businesses should strive to enhance their resilience and renewal strategies to survive and recover from this public health disaster rather than relying on assistance from the government.
Lastly, we have identi ed some limitations in our studies. Due to the lack of a uniform and standardized de nition of SMEs across economies, one should be careful when trying to generalize our ndings to SMEs in other jurisdictions as their size and resources may not be comparable. This research focused on Macau, an economy with ample nancial resources due to high gaming and tourism tax income. Whether small rms operating in other contexts would react in the same way should be further studied. Moreover, our research ndings suggest that rm size, crisis experience, history of the rm, and government regulation are factors that may impact the crisis management, survival, and resilience strategies adopted by the rms. Yet which of these factors dominates may be further researched by focusing on a speci c sector and expanding the sample size.

Consent for publication
We have obtained consent from the participating rms and interviewees to publish the contents of the interviews. All participating rms and interviewees will remain anonymous.

Availability of data and materials
Summary of the data collected is presented in the tables. Details of data and materials are available upon request. Please contact Tan Cheng LOK at stellalok@chwcpa.com.mo. To examine the impacts of COVID-19 on firms of different sizes and HR policies.
Part 2 : Q1, 2, 3 Impacts and Challenges of COVID-19 To understand the economic impacts of the outbreak on the firms.

Q4 Impact of Firm Size
To investigate whether the firm size is related to economic loss.

Q5 Follow-Up
To follow up with the economic loss.

Q1 Previous Crisis Experience
To understand previous crisis experience.

Q2-7 Crisis Management Strategies
To understand the crisis management strategies of the firms.

Perspective
To study the survival strategies adopted by the firms from the stakeholders' perspective.

Q12 Firm Size
To investigate whether firm size affects survival strategies.
Q13 Expected time of the impacts To study the expected time of the impacts of COVID-19.

Q14-16, 18
Recovery Strategies To examine the recovery strategies adopted by the firms.

Q17 Dynamic Learning
To investigate the dynamic learning of the firms.

Q19 Follow-Up of Recovery
To examine the usefulness of the recovery strategies.

Q20 Firm Size
To study whether firm size affects recovery strategies.

Q21, 22 Satisfaction with Government Policies and Further Recommendations
To investigate whether small firms are satisfied with existing policies and provide recommendations for policymaking.     Model of Resilience Strategies for Small Businesses

Supplementary Files
This is a list of supplementary les associated with this preprint. Click to download. Appendix.docx