One-third of SMEs ‘may never re-open’ after Covid-19, study reveals
One-third of small businesses believe they will never reopen as a result of Covid-19 disruption, according to the latest research.
The finding forms part of the Federation of Small Businesses’ (FSB) new membership survey – a poll of more than 5,000 small firms in the UK.
According to the research, four in 10 (41 per cent) members were forced to close their doors following strict lockdown restrictions.
But over a third (35 per cent) are “not sure” if they will ever reopen again.
The study points to financial distress as the major cause of doubt. Around a quarter (28 per cent) of those surveyed say they have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of Covid-19 disruption.
A further 25 per cent, meanwhile, say cash flow issues have forced the cancellation of major growth or development plans, while a similar proportion (21 per cent) report reducing or cancelling international expansion.
However, seven in 10 small firms say the Coronavirus Job Retention Scheme (CJRS) has “aided the survival” of their organisation. Still, more than a third (37 per cent) are considering or have already made redundancies in response to the changing business environment.
Commenting on the figures, FSB National Chairman Mike Cherry said the impact of the coronavirus pandemic has been felt “right across the small business community”, but Government support will help thousands of business owners survive.
“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase. The crucial support that’s on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery.”
He added: “We’re hearing from business owners who are falling through the cracks and taking their stories straight to the top of government. Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind.”