The government recently confirmed an extension to England’s lockdown, dashing the hopes of a return to normal as planned on 21 June. The four-week delay to the roadmap and full reopening of the economy – announced because of the rise in coronavirus cases – represents a blow for the entire country, but particularly for the self-employed and those who own small businesses. Of course, public health is paramount and the sooner we can overcome the pandemic, the better. Until then, millions of SMEs are set to continue facing harsh trading conditions.
Since the pandemic began over a year ago, small businesses up and down the country have been hit exceptionally hard. Few have been hit harder than small business owners or the self-employed.
Our research shows that Covid-19 will cost SMEs £22,461 each on average. In total the cost of Covid-19 to UK SMEs could exceed £126 billion, almost double the £69 billion initially estimated last year, leaving a gaping hole in the books of small businesses.
This financial cost does not come without consequence. We know that 840,000 SMEs are not sure their business will ever return to pre-pandemic trading levels, bringing a huge blow to both the small business community and the UK economy.
At the same time, over 2.2 million SMEs (37%) still haven’t been able to access government schemes and grants, often seen as a lifeline to help small businesses through the pandemic.
The roadmap out of lockdown and gradual re-opening of small businesses would have instilled some confidence in SME owners. In fact, over half (54%) of small business owners found reassurance in the Government’s roadmap out of lockdown, but it’s likely there will be fresh waves of uncertainty among the small business community following the latest delay.
Why does this matter? Small businesses have been operating with severe trading restrictions over the past year. Millions were forced to close and those that were able to pivot and continue trading, whether online or otherwise, have been doing so at a reduced capacity. Even now, millions of small businesses are still trading at reduced levels due to the legal restrictions in place.
SMEs account for 99% of all businesses in the UK, 33% of employment, and 22% of all turnover. Put simply, if the UK’s to recover quickly, we need small businesses to bounce back ‘ they’re the lifeblood of our economy and communities.
Thankfully, the past year has shown that the UK’s SME community is resilient, resourceful and optimistic. So as we continue to emerge from Covid-19, and in light of this most recent delay, it is vital we continue to support local businesses, shop small, and help small businesses survive and thrive.
At Simply Business we felt compelled to launch an initiative aimed at helping small businesses get back on their feet after Covid-19. Now in its second year, our Business Boost grant will enable us to give away £25,000 to one small business owner to help revive their business after lockdown. Entries for our Business Boost grant are now open and a panel of expert judges, made up of leading representatives from across business and industry, will decide on the final winner. Entries close on 17th September and we look forward to helping owners get back to business after Covid-19.