Britain’s small businesses are ‘almost universally’ predicting a significant decrease in their revenues, according to data released today.
A survey of more than 1,000 UK firms conducted by Small Business Britain and Professor Tim Vorley of Sheffield University Management School shows nearly three quarters believe their revenues will drop by more than 50%. A further 20% expect a reduction of more than 20%.
With coronavirus continuing to spread rapidly across the UK – confirmed cases now stand at 1,950, though the true number is thought to be somewhere between 35,000 and 50,000.
Yesterday’s government advice for people to avoid pubs, clubs and theatres has placed the hospitality industry under severe pressure and prompted warnings of ‘hundreds of thousands of job losses’ – but SMEs in all sectors appear gloomy about their prospects.
Small Business Britain’s survey revealed that overwhelmingly, the greatest concern small businesses have is cashflow (88%), with more than half (52%) also concerned about a reduced demand for their services.
However, a further worrying development was the survey’s revelation that more than nine in ten (93%) of small businesses have no relevant insurance as a safety net to recover lost revenue.
With such a high level of concern around the finances and day-to-day activity of their businesses, small business owners have taken limited steps to put in contingency plans: one in three (31%) will ask their staff to take unpaid leave and a similar number will reduce their employees’ working hours. Just over one-quarter (27%) are considering moving their business online.
Yet as small businesses look for routes to survival, only 17% have so far sought advice in areas such as financial planning, business resilience and digital skills.
Small Business Britain founder Michelle Ovens said: “It’s not surprising small businesses are concerned by the coronavirus outbreak but seeing the figures laid out like this truly puts into perspective how damaging the long-term disruption will be.
“While financial aid goes some way to assisting businesses, there is a need for ongoing business support in areas such as financial planning, business resilience, marketing, strategic planning and digital skills.
“One of the most important things any small business can do right now is to ensure they have the adequate skills to move aspects of their operations online; this may well be the key to preventing job losses and ensuring customers remain engaged with their products and services over the coming months.”
And Professor Vorley, Deputy Dean at the Sheffield University Management School said: “Right now, there may not be much comfort to small business owners concerned with their cash flow, their revenues and a loss of customers – as well as with their own health of course – but I want to urge small businesses to remember that there are support networks out there who can provide help with business resilience and help to mitigate their losses.
“We therefore want to encourage all those working in and leading the small business sector to both offer and reach out for support.
“It is critical that those who have the resources to come through this crisis lend a hand to small businesses who are struggling.
“It is concerning how few small businesses have the safety net of insurance, and they will need all the help they can get.”