By Covid-19 has hit small business hard. Can they recover?
British banking and bookkeeping ap, Amaiz, have today released results of a consumer survey discussing the effects of the coronavirus pandemic on small businesses.
Due to the nature of this viral pandemic, small businesses who are most at risk of financial loss are usually concentrated in a handful of industries such as accommodation and food services, construction, retail, healthcare and social assistance.
Results from Amaiz’s study, which was carried out by 3Gem, show that around 10% of small businesses surveyed reported a total loss of businesses as a direct result of the lockdown.
Whilst this may seem like a low percentage, it’s also interesting to note that the study found more than one third of businesses had lost at least 30% of their business, whilst half of all businesses surveyed had lost over 20%.
Across the economy, trade, investment, growth, and employment are all affected by the pandemic and many businesses have questioned their ability to recover, even as the country starts to ease lockdown. While a small majority of businesses surveyed (59%) believe that it will take them less than 6 months to return to previous turnover levels, a quarter of them believe it will take at least a year to recover and 5% believe that they have no chance of recovery at all.
PWC UK appear agree with a high chance of recovery when it comes to the retail sector. They report that whilst the last recession saw people struggle financially, their latest consumer sentiment survey shows that, this time, shoppers have more disposable income and significantly stronger consumer confidence (-12 vs -52).
Matt Goddard, Head of Acquisitions for Amaiz, commented:
“Small business is the lifeblood of the UK economy. FSB figures show that in 2019 SMEs accounted for three fifths of employment and around half of turnover in the UK private sector. It is tragic, but not unexpected, to hear that small businesses have suffered so badly during the pandemic.”
With restrictions on retail and non essential stores already lifting across the country, and the Prime Minister announcing further changes from 4 July – small businesses are looking forward to once again welcoming customers, clients and, more importantly, making sales.
Based on trends from overseas, PWC UK believe that all businesses are likely to see a further bounce in footfall once restaurants, pubs, hairdressers and many other small businesses reopen in July.
Photo by Kelly Sikkema on Unsplash
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