A survey conducted by Dartford-based Blue Rocket Accounting has revealed that COVID-19 has cost small business owners in the South East more than just financial losses. Although nearly 80% of businesses surveyed have said financial losses have been the biggest cost, the results show that the Coronavirus pandemic has had other significant impacts, including mental strain, lost customers and morale, and permanent staff redundancies.
The survey also highlighted that many business owners were unprepared for the impact, with 65% either having no funds, or insufficient funds, to carry them through this difficult time.
As a result, 6% say they wish they were an employee, not a business owner. But, whilst it’s been and continues to be tough, 48% have said that they can see a future ahead. Many business owners have demonstrated great resilience, digging deep to ensure the survival of their businesses, with some even thriving during this difficult time, painting an optimistic view of the future for businesses in the South East.
For their Business Security and Confidence Study, Blue Rocket Accounting surveyed 104 of their clients and contacts located in Kent as well as further afield across London and the South East, across a broad range of sectors.
41% of small businesses estimate COVID-19 will reduce their turnover by 10-30%, but some are bucking this trend.
Blue Rocket Accounting asked small business owners what percentage reduction in company turnover they foresee:
– 9% of business owners surveyed believe their turnover will drop by over four fifths
– A reduction of between 51-80% in turnover is expected by 7% of those surveyed
– Just over a fifth predict losses in turnover of 31-50%
– 41% of respondents revealed that they would lose between 10-30% in turnover
– 5% of those surveyed expect less than a 10% reduction
– Business owners were also asked about other impacts:
– 52% have suffered mental strain
– 43% have lost customers
– Loss of morale has been experienced by 30%
– 1% will have to start their business all over again
But, there are some success stories, with nearly 6% of those surveyed saying they have increased their turnover, and some predicting increases of up to 300%.
When asked what changes business owners have had to make to secure their company’s future, 58% said reducing company expenditure, closely followed by furloughing staff at 57%. Nearly 42% of business owners have had to reduce their own salaries and 38% have taken out loans to keep their businesses going.
Over half have also had to adapt their working practices, with changes including staff working remotely and implementation of new technologies and systems to facilitate this, amending payment terms, reconfiguring the workplace to allow safe social distancing and increasing hygiene measures for those who cannot work from home, and increasing their profile to make their service stand out in the market.
With lockdown in the UK starting to ease after more than two months of restrictions, and the UK Government announcing that non-essential retail can reopen later this month, businesses are increasingly expected to welcome back employees over the coming weeks. But, will businesses return to ‘normal’?
When asked, 44% say their business won’t return to normal when lockdown is lifted, but how confident are business owners feeling about the future? 38% remain confident that they’ll continue to do good business.
Whilst the pandemic is causing uncertainty for the UK’s small businesses, there are signs of strength among business owners. And, with SMEs accounting for 99% of Britain’s businesses, their continued success is crucial for the economy.
Despite the disruption caused by COVID-19, two-thirds of business owners are very confident that their company has a positive future, 31% are unsure and, sadly, 3% are very worried that their company does not have a positive future.
Accountants have provided the most valuable support for business owners. During this time of crisis, business owners have been turning to many sources for information and advice on how best to shore up and mitigate risks to their companies. 5% say their bank has been helpful, but the leading source of support has been accountants, with two-thirds of respondents
saying that they have provided the most valuable advice.
“The results of this survey show how much COVID-19 has affected our clients and network of contacts, and we know that many were unprepared for the impact of these challenging circumstances. This is something I believe is reflected across the wider business community,” comments Miguel Calabrese, MD at Blue Rocket Accounting.
“One thing that has really stood out is the resilience of small business owners, and their ability to adapt when under pressure. One of our local bakeries is now selling make your own pizza kits where they deliver a box with all the ingredients and families can make their own pizzas. They have replicated this approach for brownies, cakes, cookies etc. This is just one example of triumph in difficult circumstances, and a testimony to how great Britain’s small businesses are.”