One in five UK businesses say they won’t survive another lockdown
By Dawn Gibson
Almost one fifth of SMEs don’t think they would survive another lockdown and would be forced to stop trading permanently if one came into effect, a new report by small business insurer Simply Business reveals.
In a stark reminder of the deep economic impact of coronavirus on businesses across the UK, six out of 10 SME owners say they feel less confident about the long-term prospects of their business, even though most are comfortable resuming trading while adhering to government guidelines.
A quarter of business owners think it will take 12 to 18 months to recover the money lost due to Covid-19, and one in 10 think it could take as long as two to three years. A quarter think it will take six to 12 months for customer numbers to return to normal.
Simply Business surveyed more than 500 SME owners in August about their business outlook.
Alan Thomas, UK CEO at Simply Business, says the research highlighted the potentially grave impact that further lockdowns could have on many small businesses.
“Few have been financially harder hit than SMEs, small businesses, and the self-employed, and it’s telling that many live in fear of another lockdown and the consequences it would have on their business,” he says.
“SMEs account for 99% of all UK businesses, and contribute a combined £2 trillion annually. Put simply, we need small businesses to bounce back if we’re to recover economically.”
Encouragingly, 68% of small business owners expect their employee numbers to remain the same. However, one in five expect to reduce staff.
Small businesses reported some positives from their lockdown experience. A quarter of owners say their staff have learnt new skills, while one in five have found new customers, adopted new technologies and/or expanded to offer more products or services.
Technology has arguably had the biggest impact on how well a business has been able to survive, with 42% of SME owners saying they are now more reliant on technology.
Around half are using messaging apps more for business, while 33% have increased their use of social media, 36% have introduced contactless or online payment systems, and 25% have started to use online delivery services.
“It’s promising to see the level of resilience and innovation in the small business community – the greater adoption of technology and learning of new skills is a real positive and bodes well for the future,” says Thomas.
“However, whilst business owners are innovating, they are still reliant on macro-economic policy. Government’s decision to implement local lockdowns could decide the fate of many small businesses.”
Simply Business has announced a £10,000 Business Boost grant, which will be given to a UK entrepreneur to help start or revive their business. Applications are open until September 28 and the shortlist will be announced by October 9, with the winner announced in early November.
Small business owners can apply for the Business Boost grant here.
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