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Coronavirus Lockdown 2.0: How will this affect SME’s?

Written by Latifa Yedroudj on Monday, 02 November 2020. Posted in Politics, Analysis

As England faces its second lockdown, how will businesses cope with the changes?

Coronavirus Lockdown 2.0: How will this affect SME’s?

As England faces its second lockdown, how will businesses cope with the changes?

Prime Minister Boris Johnson announced a four-week lockdown in England starting on November 5 in a bid to curb the spread of COVID-19. The new rules and restrictions, which will be imposed across England, will replace the previous “three-tier” system. What are the impacts SMEs across the country will face?

On Saturday, Mr Johnson announced the new measures during a press conference at Downing Street alongside chief scientific adviser Sir Patrick Vallance and chief medical officer Professor Chris Whitty. During the press conference, Mr Johnson said: “Our hope was that by strong local action, strong local leadership, we could get the rates of infection down where the disease was surging”, but that “the virus has been spreading even faster than the reasonable worst-case scenario of our scientific advisers”.  

“I’m afraid, from Thursday, the basic message is the same: Stay at home, protect the NHS, and save lives," he added. The new measures will remain in place until December 2, Mr Johnson announced. This means all “non-essential” shops will be forced to close, including clothing and electronic stores, vehicle showrooms, travel agents and betting shops. Auction houses, tailors, car washes, tobacco and vape shops will also be shut. However, non-essential retail shops can remain open for delivery or click-and-collect. Pubs will also be forced to shut but still can provide takeaway and delivery services, though takeaway of alcohol will be prohibited. 

All gyms, indoor and outdoor leisure facilities will close, including swimming pools, golf courses, driving ranges, dance studios and theme parks. Hair, beauty and nail salons will be asked to close down including tattoo parlours, massage and tanning salons. Cinemas and museums, theatres, concert halls, galleries, museums and all entertainment venues will no longer be operational during the four-week lockdown. 

Places for worship will also be closed unless they are being used for funerals, to broadcast acts of worship, individual prayers, formal childcare or part of a school, essential voluntary and public services, such as blood donation or food banks and other exempted activities such as some support groups. Essential retail such as food shops and supermarkets will remain open. Hotels, hostels and other accommodation will remain open, but only for those who have to travel for work purposes and other exemptions set out in law. Under the new lockdown rules, all outbound international travel will be banned. Work and travel within the UK are also discouraged under the new regulations.

Ministers warned the lockdown could last longer than four weeks. The UK is grappling with more than 20,000 new coronavirus cases a day and scientists have warned a worst-case scenario of more than 80,000 deaths these winter months. “We can definitively say that unless we take action now, the (health service) is going to be overwhelmed in ways that none of us could countenance,” Cabinet Minister Michael Gove said. Business leaders have called for financial help from the government to support them as the crisis looms as thousands of firms will be forced to shut down. However, some business leaders remain optimistic.

Gordon Wilson, CEO of Advanced, a UK-based software business, believes technology and digital tools will help businesses progress and pave the way for growth despite a second lockdown in place.“We welcome the government’s new strategy for growth, especially its plans to turbo charge regions to become global hubs in areas such as advanced technology and life sciences,” he said. “As a business with a headquarters housing hundreds of staff in Birmingham, we are keen to work with the government and other businesses in the Midlands to position the region as the hub for technology.

“More than ever, we all need to come together to support businesses in scaling up through the recovery phase and beyond and it’s technology providers like Advanced that can step up and help. Technology is absolutely vital – we’ve seen its impact since the start of the pandemic and will continue to see its role during the second lockdown. At Advanced, we know only too well the pressure for many of our customers adopt digital tools to change the way they do business because, sadly, the old ways of working are no longer enough to survive. We are therefore encouraged by the government’s plans to work with businesses to lay future foundations. Although the plans right now are unclear, I believe we are heading in the right direction.

“We expect that driving digital skills for workers and job seekers of all ages will be a core component of these plans but we would also like to see the government ramp up financial support to not only help businesses across all industries operate online – and become digital-first – during this challenging time but to also grow and prosper when we finally beat the pandemic.”

Gareth Tennant, member of the FSC and former Head of Intelligence at the Royal Marines advised businesses to look at their “worst” and “best” case scenarios and plan for both to ensure they have the capacity and capabilities to deal with whichever outcome. 

"One of the key lessons that we need to take away from this is not ‘how to deal with pandemics’; it’s how to be prepared for the unknown,” Mr Tennant said. “Businesses need to understand that shocks, in general, happen and not that one particular type of shock may happen. In normal life, it becomes comfortable for leaders to use data to plan, but in complexity, no one can be omnipotent about what will happen. I would suggest looking at the scope of possibility and from there devising a range of best case to worst case scenarios and plan for these. This, in turn, will create the confidence for teams to talk about what they would do in these hypothetical situations, without having to deal with the baggage and stress that would come from actually being in these situations."

Meanwhile, Laurence Shorter, member of the FSC, executive coach and author added: “The pandemic has highlighted the need for workers and leaders to have the capacity to be comfortable with uncertainty. This notion requires some support and nurturing because it has not quite developed yet. Improvisation as a mindset is becoming more important and has encouraged people to not be afraid of what is next."

Business leaders have advised SMEs to expand their online presence and win customers over using digital platforms during this lockdown. Andrew Fowkes, Global Retail Practice, SAS said: “We have seen a huge surge in first-time digital customers, who are likely to remain online-first or even online-only for the foreseeable future. This presents a huge opportunity for retailers to capture a new market. Brands must engage these customers, and leverage data to make better decisions about what goods to offer them at what price. By understanding what customers want from their shopping experience, businesses relying on online sales during lockdown can compete with and beat the established ecommerce juggernauts.”

With a second UK lockdown in place until December, it is unclear what the future holds with some speculating the lockdown could be extended further. High street businesses will be faced with a major blow as more firms will be left struggling to make ends meet. With the Christmas period arriving, a vast number of consumers are expected to shop online which will see an inevitable growth in e-commerce.

About the Author

Latifa Yedroudj

Latifa Yedroudj

Latifa Yedroudj has joined the Elite team to fully immerse herself in the business side of journalism, a strong passion of hers cultivated from young having co-run her mother's start up business since she was 18. Her interests lie in a wide range of subjects, including start ups, business, travel, and anything entrepreneurial she can get her hands on. She has worked for some of the biggest names in journalism including The Guardian and The Mirror. Follow her on @latifayed on Twitter for her latest journo rants.

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