More than 250,000 small businesses fear they won’t make it in 2021
This is the stark headline from the latest quarterly members poll from the Federation of Small Businesses (FSB) published this week.
They reported that just under 5% of their 1,400 respondents said they expected to close down this year – the largest proportion in the history of their Small Business Index survey.
If the same ratio is applied nationwide then as many as 295,000 companies would cease trading by the end of the year.
A further 80% of respondents didn’t expect to see their own prospects improving over the next three months primarily citing that the tougher lockdown restrictions were likely to remain in place.
Just under 25% had already made redundancies during the last three months while one in seven expected to do so between now and the end of March – potentially affecting the jobs of the 16.8 million employees.
Mike Cherry, National Chair of the FSB, said that the amount of government support had dwindled as the pandemic increased in severity and scope.
He said: “At the outset of the first national lockdown, the UK government was bold. The support mechanisms put in place weren’t perfect, but they were an exceptionally good starting point.
“That’s why it’s so disappointing that it’s met this lockdown with a whimper.”
He said that while support for the retail, leisure and hospitality businesses that had already been received it was welcome, many were still being left out in the cold including company directors, the newly self-employed, supply chains and firms that operate without commercial premises.
The FSB wants to see additional support for small businesses including grants, income support and extended debt relief but warn that firms already lack the reserves and resources to manage the tough trading environment.
All of this is before factoring in any further changes that Brexit and the new trading relationship with the EU will bring to them too.
Almost half of the respondents said they expected to see their international sales fall in 2021.
The FSB survey is the first large scale research undertaken this year and underlines some of the challenges immediately facing businesses.
While the vaccine rollout continues and offers hope for a return to normality of sorts in the latter half of the year, companies still have to make it through to this point and be trading in order to take advantage of any pent up customer demand.
One of the best things businesses can do right now is to start making a survival plan based on them still being around for the second half of the year especially if they can’t trade right now.
These will allow a business to be protected creditors and their recovery measures while getting into the best possible shape to take advantage once pandemic restrictions are gradually lifted, businesses in certain sectors are allowed to reopen and customers begin to shop again – physically and online.
But none of this can happen unless you take the initiative and get in touch first.