Nearly a quarter of small retailers and hospitality firms don’t know when they’ll open their doors again after being forced to close, according to new research carried out among the UK’s once thriving small business sector.
Nationally, a total of 35 per cent of all SMEs said they had been forced to shut down during the Covid-19 crisis. While 18 per cent said they were planning to reopen, 17 per cent admitted they were unsure when they would be able to get back to work.
The figure was fairly consistent across most industry sectors, but the retail and hospitality sectors were worst hit, with 24 per cent saying they didn’t know when they would be up and running again.
The UK’s small businesses have been badly hit by the impact of Covid-19 in terms of both income and working practices, which could take years to recover from, according to the first Small Business Monitor from WorkLife, the new employee benefits service from online money manager OpenMoney.
Almost three quarters of firms saw their income reduce during the pandemic, with 46 per cent reporting that it had fallen by up to half. Perhaps more worrying is the fact that 62 per cent of SMEs expect their income to remain subdued over the next 12 months, with 42 per cent saying it will be reduced by up to 50 per cent. Five per cent don’t expect to recover any income at all over the coming year, putting their futures in doubt.
With Britain’s small business sector employing more than 16.5 million people, this will also have a devastating effect on the country’s workforce, many of whom are already struggling financially themselves. Almost three million cash-strapped people have been given payment holidays on their mortgages and credit cards.
Rob Marshall, managing director of WorkLife, believes that companies and employees need help to get back on their feet. He says: “We’ve all seen our high streets devastated during lockdown with shuttered shops, pubs and restaurants. The likelihood is that many won’t reopen.
“But for those that can reopen, as our Small Business Monitor shows, the worst is far from over. Income has reduced, while the changes needed to operate under social distancing rules are likely to push up their costs even further. This is a massive strain on everybody working there.”
To support both small firms and their workers, WorkLife is offering its newly launched employee benefits service at no cost to companies for the rest of the year. One of the key elements of WorkLife is a free financial advice service for all employees, provided by OpenMoney.
Marshall explains: “As our research shows, the current situation is bad news for bosses and terrible news for their employees, many of whom will already be worried about job security and their personal financial situation. But with WorkLife, there is a real opportunity for employers to provide their workers with the help they need during what is clearly going to be a difficult period of recovery and return to work. And it won’t cost companies a penny for the rest of 2020.”
WorkLife’s Small Business Monitor is based on research carried out by 3Gem among 750 senior financial and HR decision makers in UK SME companies with five – 250 employees. Fieldwork took place in June 2020.