The impact of coronavirus to small businesses operating in food and beverage will exceed £21,586 each in lost work, earnings and loan repayments, with well over half (55%) at risk of permanently closing, according to a new report.
Analysis of over 250 small businesses operating in food and beverage, within the hospitality industry, released by small business insurer Simply Business, reveals that well over a half (54%) are also very concerned about the future of their business. The figures come as the hospitality sector began to emerge from the crisis with many opening their doors on Saturday (4th July).
Not only this, but well over half (55%) of small business owners in food and beverage fear their business is at risk of permanently closing due to the pandemic. One fifth (19%) believe they’re likely to close within 3-6 months, well over a tenth (15%) within 6 months to a year, and another 14% within the next three months months.
Looking ahead, the study also revealed how SMEs within food and beverage feel about life after coronavirus, with just over half (52%) worrying about losing customers and their jobs from the pandemic.
Worryingly, one third (35%) of small business owners operating in food and beverage are also concerned about running out of money, with one in three (32%) admitting they have had to borrow money from friends and family to keep afloat.
However, one fifth (20%) are concerned about being able to pay back the money borrowed and one in five (18%) SME owners are worried about going completely bankrupt.
The study also found that seven out of 10 (71%) SME’s within food and beverage were able to apply for government grants, loans and schemes and well over a third (36%) have felt particularly supported. Only one quarter (24%) feel fully supported and just over the same amount (28%) have felt no support at all. When looking at improvements, two in 5 (39%) business owners also
felt there could have been greater communication and transparency from the government about the impact to small businesses and the self-employed.
Alan Thomas, UK CEO at Simply Business, commented: “No business has been able to escape the impact of the pandemic – and that’s no different for small businesses and the self-employed. They’re the lifeblood of the economy, and with many of these at risk of permanent closure, so much is at stake for our local communities and wider economy.
“Few small businesses have been hit as hard as those in the hospitality industry, and it's clear that many will take time to recover. Small business owners and the self-employed have shown how creative, determined and resilient they are throughout the pandemic, and we know they’re going to be crucial as the UK economy looks to bounce back.
“With many pubs, bars and restaurants now able to open their doors again, we’re hoping to see hospitality businesses begin to emerge from the most challenging period and start to get their livelihoods back on track.”
Simply Business has launched a free Financial Support Checker to help small businesses, landlords and the self-employed to quickly determine what financial support and schemes are available to them during the coronavirus pandemic.
A simple questionnaire takes business owners just a few minutes to complete and will point them towards relevant government financial support.
Methodology: Data: Survey of 240 food and beverage small business owners from across the UK, conducted May 2020
How did we calculate the £21,000 figure?
100% of small business owners surveyed reported being affected financially by the coronavirus pandemic.
We asked small businesses how much they estimate the coronavirus pandemic will cost them in total, including lost earnings, jobs and revenue. The weighted average of this cost is £21,586
Launched in 2005, Simply Business provides an online brokerage service, delivering policies tailored to individual business requirements. Using the power of tech and data to create the best possible customer experiences, Simply Business employs over 800 people across offices in London, Northampton, and Boston in the US.
Owing to its internal underwriting capability, Simply Business can cover over 1,000 trade types – ranging from plumbers to accountants to dog walkers. An accredited B Corp for their positive social impact, Simply Business has also been voted the Sunday Times Best Company To Work For twice in a row.
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