Two years on from the first lockdown, a new report reveals the cost of Covid-19 to small businesses now sits at £109.6 billion.
Possibly more worrying, though, is the fact that one in six small firms believe they will never recover financially from the pandemic.
The study by small business insurance provider, Simply Business, revealed that 87% of small business owners have lost money over the last two years, averaging £20,981 each in total, with many still suffering financially.
With one in six small business owners believing they will never financially recover from the pandemic, this represents almost one million UK small businesses in total.
While others are more confident of eventually recovering financially, the outlook remains bleak, with 43% of owners saying it will take at least another year.
What’s more, one in five (21%) don’t expect to ever return to pre-pandemic trading levels.
As many small business owners continue to struggle financially, it’s no surprise to learn that one in three (32%) live in fear about running out of money. At the same time, almost one in four (23%) are concerned about being able to pay back government and private loans, or friends and family.
Despite one in six (16%) believing that their business is now better prepared for the future following the events of the last two years, small business owners are now facing a unique set of challenges as we continue to emerge from the pandemic.
Indeed, 70% of owners now state that rising costs are their single biggest challenge. This is followed by losing regular customers (63%) and supply shortages (35%). Others report losing long-standing contracts (25%), and are facing recruitment challenges (9%) and labour shortages (8%).
While Boris Johnson’s lifting of Covid restrictions was predicted to give business a boost, 31% believe things have in fact got harder since the restrictions ended – with 63% believing that the government hasn’t offered enough financial support, consultation or communication in the period since.
Furthermore, as Covid cases rise again in the UK, two in five (38%) small business owners are concerned about another lockdown and tighter restrictions, which would impact trade exponentially for a third consecutive year.
Two fifths (40%) say they are ‘not at all confident’ about their preparedness for a further lockdown or tightening of restrictions, and what’s more, a worrying 42% predict the temporary or permanent closure of their business should the UK enter another lockdown.
There is however, a glimmer of hope amongst nearly a quarter (23%) of SMEs who have strong faith in their ability to weather another lockdown.
So can we have optimism for the future? The study also revealed that 43% of owners are either ‘optimistic’ or ‘confident’ about the future of their business, while a quarter (25%) feel the challenges of Covid-19 have improved since restrictions ended earlier this year – pointing to more positive times ahead.
While Boris Johnson’s lifting of Covid restrictions earlier this year was predicted to give business a boost, 31% believe things have in fact got harder since the restrictions ended – with 63% believing that the government hasn’t offered enough financial support, consultation or communication in the period since.
Furthermore, as Covid cases rise again in the UK, two in five (38%) small business owners are concerned about another lockdown and tighter restrictions, which would impact trade exponentially for a third consecutive year.
Two fifths (40%) say they are ‘not at all confident’ about their preparedness for a further lockdown or tightening of restrictions, and what’s more, a worrying 42% predict the temporary or permanent closure of their business should the UK enter another lockdown.
There is however, a glimmer of hope amongst nearly a quarter (23%) of SMEs who have strong faith in their ability to weather another lockdown.
So can we have optimism for the future? The study also revealed that 43% of owners are either ‘optimistic’ or ‘confident’ about the future of their business, while a quarter (25%) feel the challenges of Covid-19 have improved since restrictions ended earlier this year – pointing to more positive times ahead.
SBLTV Knowledge has been funded by Shropshire Council’s Economic Recovery Programme, working in association with The Marches Growth Hub Shropshire. The programme was set up to meet local economic need following the Covid-19 pandemic and deliver Shropshire-wide business outcomes.
© 2022|SBLTV Knowledge | Privacy Policy
Follow us on social media:
