Impact of Covid-19 on small business set to exceed £126 billion
2-minute read
As we mark one year since the UK first went into lockdown, new research reveals that Covid-19 is set to cost small business owners tens of thousands of pounds each.
We surveyed 1,200 small business owners and self-employed people across the UK for our study of the pandemic one year on.
Compared with research from May 2020, the latest report reveals that the coronavirus pandemic and multiple lockdowns have cost the self-employed double what they initially projected.
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Small businesses estimate Covid-19 will cost them £22,461 on average
We asked small businesses how much they think Covid-19 will cost them in total, including lost work, earnings and total revenue.
The 1,200 people surveyed revealed it would cost them £22,461 on average. Applying this figure to the six million small and medium-sized businesses in the UK, this amounts to a total cost of over £126.6 billion.
While almost one in 10 expect the pandemic to cost them over £50,000.
A financial blow to the economy
Over 840,000 small business owners aren’t sure if their business will ever return to pre-pandemic trading levels.
With six million SMEs in the UK, accounting for over 99 per cent of all businesses, 33 per cent of employment and 21 per cent of all economic turnover, the cost of the pandemic has the potential to send ripples through our economy and communities.
Has government financial support gone far enough?
While we’ve seen a range of local and national support schemes throughout the pandemic, a lack of clarity and limits on who’s eligible mean many businesses missed out on vital support.
Overall, 81 per cent of respondents say they haven’t had enough support from the government.
- 41 per cent don’t feel supported at all
- 40 per cent have had some support but not enough
What’s more, 37 per cent say they haven’t been able to access government schemes and grants at all, leading to a concern that support hasn’t gone far enough.
What support did small businesses have access to?
Our research found that while some self-employed people have been able to access financial support, it’s worrying to see how few business owners have benefited.
Government scheme | % said they benefited |
|---|---|
Self-employed Income Support Scheme | 33 per cent |
Bounce Back Loan Scheme | 26 per cent |
Local Restrictions Support Grant | 18 per cent |
Business rates holiday | 5 per cent |
Coronavirus Business Interruption Loan Scheme | 3 per cent |
What more could have been done?
When it comes to what more the government could have done to support small businesses over the last 12 months:
- 46 per cent say a wider range of financial support schemes
- 24 per cent believe finance should have been released quicker
- 24 per cent say greater communication and transparency
- 23 per cent feel more clarity on restrictions and regulation in their industry
- 9 per cent think applications should have been easier to complete
Uncertainty continues, but with a level of optimism
Our survey found that while there’s still a level of uncertainty, many business owners hope to return to pre-pandemic trading levels before too long:
- 25 per cent believe trading will be back to normal by spring or summer 2022
- 14 per cent predict they'll be back to normal levels by the end of this year
Countless examples of resilience
Alan Thomas, Simply Business UK CEO, said: “No business, big or small, has been able to escape the impact of the Covid-19 pandemic – with 12 months of restrictions, lockdowns, and uncertainty always likely to take its toll.”
He added: “While the government support packages have proven a lifeline to many small businesses through the pandemic, our research reveals that 81 per cent of self-employed people feel it hasn’t been enough – with over two million SMEs unable to access any financial support.
“Yet in all of this, we have seen countless examples of the resilience, resourcefulness, and creativity that we have come to associate with the UK’s small business owners.”
How are you feeling about the future? Let us know in the comments.
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Written by
Catriona Smith
Catriona Smith is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
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