As we near the first anniversary of lockdown, it’s natural to look back on the past year and consider how dramatic the effect of multiple lockdowns has been. For SMEs in particular, the past year has been especially challenging. Running a small business is hard even under the best of circumstances – and the past year has certainly not been the best of circumstances.
As we stare down the barrel of a third lockdown with no end date in sight, it is not surprising that the pressures that SME leaders have felt in the past year have started to take a toll on mental health. Concerns about profitability, redundancies and even going into administration are playing on people’s minds.
Our recent research with 500 SME leaders found that more than one in three (34%) are concerned for their mental health in 2021 amidst ongoing COVID restrictions. This is while almost two thirds (65%) are concerned about a loss of profits, 38% about long-term debt, and 35% about going into administration. It makes for grim reading.
For SMEs like Trafalgar Marquees who operate in the events and hospitality sector, the past year has been particularly hard. Managing Director James Morris, has said that the effects on his mental health have been huge and his mental and personal resilience has been crucial to see his business through the pandemic.
James has built his business since he was an undergraduate at university. Before the pandemic he was working with the likes of BP and Clifford Chance, but income disappeared overnight when live events, the chief source of his income, had to stop. For an SME founder who has gradually built up a business over time, to suddenly see it shrink overnight, it is perhaps unsurprising that this has had an effect on his mental health.
Looking at the bigger picture, the economy and consumer confidence is also a big concern for SMEs. The furlough scheme, due to come to an end in April will doubtless have an effect on the economy through millions of lost jobs, followed by an impact on consumer confidence. Half of the SMEs in our research said they were concerned about consumer confidence in 2021 amidst COVID restrictions and Brexit.
Brexit has thrown another giant spanner into the works at the worst possible time. SMEs are only now starting get to grips with what changes this will have on their business. According to our research 43% of SMES are concerned about supply chain disruption as a result of Brexit. It’s another pressure on already stressed-out SME leaders.
But it doesn’t have to all be negative. While there has been a lot of pain, those businesses who are still operating have every opportunity to survive the pandemic and Brexit.
We don’t know how much longer we will be in lockdown but we do know that the pandemic will come to an end. SME leaders need help and advice in how to recover and build their businesses again, whether it’s about how they take their staff with them when they build up their business again, how they innovate, or how they build the resilience in themselves and their business.
The Small Business Leadership Programme is a government funded programme running through January which will provide free training to support the resilience and growth of small to medium size businesses affected by COVID-19, across England. Facilitated by some of our top business schools, the programme will help leaders develop their leadership skills to navigate through these challenging times.
According to our research, 69% of SME leaders would value additional training to help their business survive and grow in 2021.We would urge all SMEs not to face this alone – there is help out there. With help in leadership, innovation and planning, it is possible for SME leaders to turn their business around and plan for better times.