Almost one fifth of SMEs don’t think they’d survive another lockdown

Almost one fi[ h of SMEs don’t think they’d survive another lockdown Almost one fi fth (17%) of UK SMEs don’t think they’d survive another lockdown and would be forced to stop trading permanently if one came into eff ect, according to a new report by small business insurer Simply Business.

Simply Business spoke to over 500 SME owners across the UK and also found that a third (32%) feel they’d be impacted worse than the first lockdown but would survive. A further third (34%) feel a second lockdown would have the same impact as the fi rst and just 5% think they would cope be‚ er than the fi rst. When looking at business recovery, around a quarter (24%) of businesses think it will take 12-18 months to recover the money lost during Covid19. One in fi ve (19%) think 6-12 months and one in 10 (12%) think 18-24 months. A further tenth (12%) think it could take a staggering 2-3 years. In terms of customer numbers, the report found that a quarter (24%) of small businesses also believe it will take between 6-12 months for their customer numbers to return to normal. Well over a tenth (14%) think it could be over a year.

Employment numbers

Encouragingly, 68% of small business owners expect their employee numbers to remain the same. However, one in five (21%) expect it to decrease, the majority of which (13%) expect it to decrease signifi - cantly, puম ng a risk to employment levels across SMEs.

Business confi dence

The study also showed that 62% of SME owners feel less confident about the long-term prospects of their business. The majority do, However, feel comfortable about resuming trading whilst adhering to government guidelines. Within this, 43% say they are ‘comfortable’ and a further 30% are ‘very comfortable’.

Posiঞ ve outcomes

Despite the overall challenges, there are some positives to come out of lockdown. A quarter (25%) of SME owners say their staff have learnt new skills, one in fi ve (21%) have found new customers, and 19% of SMEs have adopted new technologies. Almost one fifth (17%) have even expanded to off er more products or services. Technology has arguably had the biggest impact on how well a business has been able to survive lockdown, with 42% of SME owners saying they are more reliant on technology now because of coronavirus. Just under half (47%) are using messaging apps more (such as Facebook Messenger or Whatsapp) for business, a third (33%) have increased their use of social media, 36% have introduced contactless or online payment systems, and a quarter (25%) have started to use online delivery services.

Alan Thomas, UK CEO at Simply

Business, commented:

“The naࢼ onwide lockdown has had a significant effect on all businesses – from the very largest to the smallest. And our research has highlighted the potentially fatal impact that further lockdowns could have on many small businesses in the UK. “Few have been fi nancially 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. “It’s promising to see the level of resilience and innovaࢼ on in the small business community – the greater adopࢼ on of technology, and learning of new skills is a real posiࢼ ve and bodes well for the future. “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. “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. “This is why we’ve launched a £10,000 Business Boost grant. We’ll be giving away £10,000 to one entrepreneur – to help them start or revive their business – providing a fi nancial boost, and potenࢼ ally a lifeline, in these economically challenging ࢼ mes.” Small business owners can apply for the Business Boost grant here. Applications are open until Monday 28 September and the shortlist will be announced by 9 October The winner will be announced in early November.