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East Anglian, London and North West SMEs will be the worst affected by the Covid-19 pandemic, according to new research by small business insurer Simply Business.
The study by Simply Business spoke to over 1,200 SMEs across the UK to measure the impact of coronavirus on small businesses. The report found that SMEs in East Anglia, London and The North West have been the most affected by the pandemic.
East Anglian SMEs have felt the greatest financial impact across the UK, with an average loss of £25,035 each so far and expecting total losses to almost double to a staggering £44,703. Following closely behind, SMEs in London have lost an average of £23,667 so far, with a total loss of £38,127 projected each. North West SMEs have suffered a total loss of £39,350 each on average so far.
Some regions have been hit harder than others. Nationally, SMEs have lost £19,205 each on average so far due to the pandemic, and expect total losses to reach £26,852, each. Some regions have experienced a financial impact greater than the UK average, whether due to difficulty in accessing government support or through tighter regional lockdowns and restrictions at different stages throughout the pandemic.
|Region||Covid cost so far||Estimated total cost of Covid|
|North West England||£21,766||£23,766|
|North East England||£17,368||£22,920|
|South East England||£15,671||£22,577|
|South West England||£14,953||£16,472|
The study found the Covid 19 pandemic has emphasised the North-South divide. With the exception of London where offices emptied and many people stayed local to their hometowns, SMEs in the north appear to have been particularly hard hit.
Northern regions are in the top worst affected areas and overall, SMEs in the north have lost an average of £39,350 each in lost earnings. This compares to southern regions losing an average of £30,624 each in lost earnings over the past 12 months.
SMEs contribute £2 trillion annually to the UK economy and account for 99% of all UK businesses. So despite the staggering financial impact due to Covid-19, it's reassuring to see signs of optimism and resilience among SMEs.
Almost a fifth (22%) of SMEs surveyed in all regions say they're optimistic about life after the pandemic, with one in ten (10%) stating they're confident enough to start a new business.
Alan Thomas, UK CEO at Simply Business, commented: “The pandemic has had a significant impact on all businesses, regardless of size – but few have been hit harder than small businesses and the self-employed.
“The scale of the impact is abundantly clear, with Covid-19 set to cost SMEs £126.6 billion in total. The effect of Covid-19 varies across regions with some being hit even harder than others. This is a huge blow to the economy at large, but will have an even greater impact on the people behind these firms – small business owners, all of which have families, livelihoods, and dreams to protect.
“At Simply Business, we’re encouraged to see losses in some regions begin to stabilize. SMEs themselves remain brilliantly resilient about life after Covid-19. As the economy continues to re-open, it’s vital we pay attention to, and support small businesses as much as we can. Shopping local, visiting your local bakers or hairdressers, and ordering online from small businesses, will go a long way in helping them survive and thrive into the future.”
You can read the full Simply Business report looking at the impact of coronavirus on small businesses in the UK here.
Data: Survey of 1,206 small business owners from across the UK, conducted March 2021
Previous survey from last year: Survey of 3,734 small business owners from across the UK, conducted May 2020
How did we calculate the £126.6 billion figure?
March 2021: 94% of SMEs surveyed say Covid-19 has/will affect them financially 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 £22,461 How did we calculate the £69 billion figure? May 2020: 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 £22,461. £11,779 multiplied by the number of SMEs in the UK = £134,766,000,000
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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