Small businesses across the country have faced a series of challenges over the past few years, with Covid-19 restrictions and lockdowns, followed by supply issues and soaring costs. These challenges not only impact profit, but have also taken a significant toll on the emotional and mental wellbeing of business owners.
As many business owners still battle the lasting effects of the pandemic, 70% say that rising costs represent the single biggest risk to recovery. This has left many owners with little choice but to put survival tactics in place.
In our new SME Insights Report – a study of over 1,000 small businesses – we have found that half (49%) are being forced to increase their prices, with 7% of these saying the increases could be as much as 20%. Some SMEs are even planning to stop taking on new hires, while one in five (20%) say they’re also unlikely to purchase any new equipment or tools in a bid to reduce spending.
Despite the economic outlook, it’s encouraging to see that SME confidence is improving as the pandemic recovery continues. The majority of owners (71%) are both confident and optimistic for the future of their business – 7% told us that they’re likely to start another new business this year. With a third of people in the UK now running their own side hustle – 55% of which were set up during the pandemic – it’s clear that the resilience, resourcefulness and creativity among small businesses nationwide remains strong.
This is very promising, especially when compared to the confidence levels reported during the pandemic – in July 2020, one in five predicted that their business wouldn’t survive another lockdown.
With almost six million SMEs in the UK – accounting for over 99% of all businesses, 33% of employment and 21% of all turnover – it’s vital that they weather this winter of uncertainty. If the UK’s SMEs can’t recover, the economy can’t recover.
At Simply Business, we have been able to see first-hand how small businesses – from restaurants and accountants, to builders and hairdressers – have been able to adapt in the most challenging circumstances. It’s important for all of us that they keep this resilience through the next six months and beyond. That’s why it’s now more important than ever for the nation to support small businesses and help them not just survive but thrive for years to come.
