A third of UK small businesses don’t expect to be trading in a year
A survey by law firm Fladgate has found that a third of small businesses in the UK don’t expect to be trading in a year’s time, painting a rather pessimistic picture of small business trading in the UK amid ongoing Covid-19 restrictions.
That, combined with the end of the Brexit transition period at the end of this year, is causing concern for many small business owners, as well as for some larger businesses too. The same survey found that a fifth of businesses asked said that they’re already experiencing distress.
A concerning outlook for the UK economy
When the economy is experiencing difficulties, it’s often small businesses that are hit hardest and hit first. That’s why the pessimism of small business owners is something that’s considered concerning and why it should be taken seriously. It suggests that the wider economy is in trouble, and this is in line with the belief that further declines in economic growth are in the pipeline. Growth slowed in August this year and further stagnation is expected.
Medium-sized businesses are pessimistic too
The research involved not only speaking to small business owners but also medium-sized businesses. Their responses were even starker, with 43% of medium-sized business owners reporting that they didn’t expect to be in business in a year’s time. With so many businesses not seeing a future and already predicting their own decline, trouble is surely ahead for what’s considered to be the backbone of the economy. Things can change quickly, but right now things aren’t looking positive.
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There’s uncertainty regarding how to move forward
There’s a lot of uncertainty in the UK business community right now about how business can move forward. Not only is there a real uncertainty about how current and future Covid-19 restrictions might hamper their ability to do business and reach customers, but there’s also still a sense of uncertainty about how things might play out at the end of the December when the safety net of the Brexit transition period is taken away. Uncertainty breeds pessimism and that seems to be the case for SMEs in the UK right now.
Financial planning will be key
Planning and preparedness can’t save every business facing Covid and Brexit related problems and uncertainties. But it can help to stabilize businesses and create a better foundation for future stability and growth. Using the right Financial services for business owners will be key and ensuring the right areas are prioritized and protected moving forward from a financial point of view.
Private investors could come to the rescue
There is some hope to be found in the form of private investors, who were also consulted as part of the research compiled in Fladgate’s Restart Capital report. Private investors suggested they’d be willing to support SME businesses and 90% said they understood that businesses of this size are a vital part of the economy’s overall structure and health. With government support falling away, investment from the private sector will become increasingly important in the months ahead.
