SMEs have lost an average of £83,000 since downturn

With the rising cost of living crisis continuing to put strain on the UK, new research reveals that business leaders surveyed at start-ups and small businesses believe their company has lost on average £83,000 since the start of the economic downturn, losses which equate to half of their annual turnover.

The study from Fiverr has revealed that nearly 1 in 5 (18%) UK start-ups and small businesses polled have lost over £100,000 since the start of the economic downturn. 92% of UK start-ups and small businesses are fearful about the future of their business and nearly 1 in 5 (19%) surveyed admitted to being ‘very fearful’.

To save on costs, 40% of UK start-ups and small businesses are planning to let go of employees in 2023. Additional cost-saving measures UK start-ups and small businesses are considering in 2023 include cutting supplier costs (45%), which featured at the top of the list of planned measures. Other cost-cutting strategies for the coming year include slashing operational costs (38%) and large overheads (37%), such as physical office spaces.

Freelancers are providing a solution to small business staffing challenges 

Redundancies have unfortunately become increasingly common in the past 12 months, and to combat staff shortages in their hour of need, 41% of UK startups and small businesses are planning to hire more freelancers in 2023 to support any staffing or skills gaps, while 52% have already turned to freelancers in the past year. In this way, freelancers can be key in supporting business growth and creating a sustainable environment for businesses to thrive during a challenging economic climate.

Coupled with this, to support small businesses and SMEs during turbulent times, Fiverr recently launched an online recession hub called “The Lift”. Geared toward entrepreneurs and owners of small-to-medium sized businesses, the site features on-demand help, articles, and guides from business experts. Topics range from financial assessment to business strategy, talent outsourcing, and marketing tactics.

Bukki Adedapo, UK Country Manager at Fiverr comments: “Straight off the back of the challenges associated with COVID, and fresh into a cost of living crisis, it’s very apparent how much small business in the UK have suffered during the past few years. Unfortunately, it doesn’t look like things are going to get any easier for small businesses in 2023, and naturally, cost-cutting is one of the ways that these businesses will look to, to sustain themselves. However, SMEs can at least be confident that, if they ever face talent shortages, they have a flexible and competent pool of freelancers who can step in when required.”