Today, ten months since the start of Covid-19 in the UK, we’re revealing the extent of the COVID-19 pandemic’s impact on small and medium-sized businesses in the UK. One thing that is certain is that over and over again SMEs have shown their resilience and adaptability.
I’m reminded daily when speaking with SMEs, how against all odds, many small businesses have embraced change. Whether they’ve had to reinvent their business product or service (or both) or relocate to a home office, there is no doubt, that with the growth of remote working and an increasing use of technology, small businesses are ‘chomping at the bit’ to lead this country’s economic revival. With 2021 set to be a crunch year for many and a lot riding on a successful vaccine rollout, our research shows that SMEs predict a more realistic timeframe of summer 2022 for recovery.
Sadly, there are also some small businesses (1 in 12) who do not expect to survive the pandemic and another fifth of SMEs who say they are ‘not sure’ if they will survive long enough to take advantage of any change in the current restrictions. Across the UK, we’re likely to see an increasing regional disparity, with London firms forecasting a decrease of 3.8% in profits by March 2021, compared to before the pandemic. Comparing this to the East Midlands (-11.6%), West Midlands (-9.3%), Yorkshire and the Humber (-8.0%) and the North West (-7.1%).
One-in-five (18%) SMEs have started or increased sales through online platforms because of the COVID-19 pandemic, making clear that many firms have turned to technology in order to survive. Before the outbreak swept the UK, we were already re-establishing the perception of British innovation in green and technological advancements. Government’s ‘Made Smarter’ review ‘ launched in 2017 ‘ focussed on SME digital adoption nationally, with simplified funding streams and a lead partner coordinating effort within regions. Separately, the UK became the first major economy in the world to pass laws to end its contribution to global warming by 2050.
Some of the UK’s most well-known retail brands have faced difficulties since the outbreak of the pandemic. But it is not just retailers at the large end of the scale that are facing hardships: our research reveals that 3 in 10 small retailers plan to leave their premises, which casts doubt on the future of the high street. Our high streets are part of the UK’s DNA, acting as hubs that bring people together. It is vital that we do as much as we can to ensure these small businesses feel they have a home on the high street, not just so they can continue operating and making a profit, but so they can continue supporting local communities across towns and cities throughout the UK. While there is no ‘silver bullet’ solution, extensions to VAT deferrals, the furlough scheme and business rates relief could provide businesses with additional breathing space.
Running your own business can be stressful at the best of times. SME owners tend to have multiple responsibilities: they are often the company’s accountant, operational director, marketer and salesperson. Unsurprisingly, mental health issues are a growing concern for small business owners during the pandemic. Two-fifths (39%) of women running small businesses reported a decline in their mental health since the COVID-19 outbreak, compared to 26% of their male counterparts. Women were also less likely to seek support when it came to maintaining mental wellbeing, with 41% stating they would not ask for help ‘ 5% more than that of male business owners (36%).
At Santander, we realise just how much pressure SME owners are facing, and as well as providing them with helpful tips and guidance on maintaining mental wellbeing, we have partnered with Thrive, an NHS-approved tool, to help prevent and manage stress, anxiety, and related conditions. We are also partnering with MIND, the mental health charity, to enhance customer-facing colleagues’ knowledge and awareness of mental health, including how best to respond to and support our customers.
To help small businesses, we’ve continued to offer support through our Survive and Revive programme which includes access to payment solutions and how to set up your business online with our partner Elavon, insights through our webinars and our women business leaders’ mentoring programme.
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