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The price of being ‘COVID-secure’ for many small businesses

Written by Seema Desai on Wednesday, 07 July 2021. Posted in Insight, Analysis

The COVID crisis hit SME owners hard. Now that restrictions are lifting, they’re eager to recover and get back to doing what they love – running their businesses.

The price of being ‘COVID-secure’ for many small businesses

In the first few months of 2020 – before the crisis hit – everything was looking up; the economy was in a good state and the year ahead naturally would’ve sparked a sense of optimism for many small businesses.

But then March came round: lockdown started, and everything changed. And for us ‘iwocans’ – almost overnight – our focus shifted to helping these SMEs make sense of this new world we all found ourselves in.

When we asked small business owners about their situation in August 2020 – a few months into the crisis – 16% told us they were not trading at all. When we asked again in December 2020, 16% were still not trading. However, in May 2021, it seemed recovery was on the horizon, with 10% not trading, and 30% actually trading more than they were pre-crisis.

COVID restrictions costing SMEs time, money and customers

Despite signs of recovery, this research also revealed the true impact that being ‘COVID-secure’ was having on small businesses: 41% of those surveyed felt that maintaining a 'COVID-secure' workplace was ‘significantly’ or ‘very significantly’ impacting how their businesses were operating. Almost a third of small business owners told us they were sacrificing customer numbers to maintain a “COVID-secure” workplace (32%), with a quarter experiencing fewer sales. A quarter also reported spending over an hour each day ensuring their workplaces were COVID safe, and 24% had spent over £1,000 doing so.

What’s more – when we asked these business owners to look ahead – around 2 in 5 (39%) were worried they wouldn't be able to afford paying themselves a salary in the next 6 months. This becomes even tougher for female SME owners, with nearly half anticipating they’d struggle to pay their own wages (45%), compared to 37% of their male counterparts. 

Looking ahead

So, while it’s encouraging to see a third of small business owners trading more now than they were in pre-COVID times, it’s clear that once restrictions can be fully lifted around the UK, we should see many more businesses bouncing back. Bouncing back – that is – from what’s probably been the toughest challenge they’ll ever have to face. 

In 2020, the world suddenly turned upside down, and it’s only just starting to shift back. As this happens, we must remember that the likes of our coffee shops, hairdressers and electricians are the backbone of our economy, and we must do everything we can to support their recovery.

About the Author

Seema Desai

Seema Desai

Seema Desai is the Chief Operations Officer at iwoca, one of UK’s largest digital small business lenders. Seema studied Natural Sciences at Cambridge before starting her career in financial services in Accenture’s strategy division. She has also worked at HBOS, GSMA and Zopa.

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