This month the Government is encouraging us to support businesses, with restrictions relaxed on visiting shops and hospitality venues amongst others. On average businesses are still only operating at half of their pre-Covid capacity with Customer demand the main reason for 54% (source: BCC). Businesses will be working especially hard over the next few weeks and months to pick up their demand, in what will be a critical time for many and may define their future. SMEs (small to medium sized enterprises) will form a large number of these, numbering almost 6 million in the UK. Many of these will be local businesses.
But why is the health of SMEs so important?
Strong SMEs mean a strong economy, contributing roughly 50% of UK GDP and employing around 60% of the UK workforce. Yet SMEs don’t have access to the same resources as bigger businesses. Research shows that SMEs were already less likely than larger firms to be able to obtain finance, with this likely to get worse as lending criteria become stricter and loans harder to come by. Cashflow tends to be the area of biggest concern for many with two-thirds reporting significant cashflow pressures even at the start of the crisis (Source: MarketFinance). But it’s now more than ever that cashflow will be vital as businesses struggle to keep going, either in a dormant state or running but contending with all that operating in a Covid-world means (e.g. investing in changes to make the place of business ‘virus-safe’).
It’s vital that we all do what we can to help strengthen this core of the UK economy.
Take hospitality as an example. More than 99% of hospitality businesses are classified as SMEs and more than 3 million people depend on this sector directly for their livelihoods; these are those on the payroll, not accounting for families and suppliers that also benefit. They largely depend on face-to-face customer transactions and having been hardest hit by the pandemic, now face a critical moment as many reopen their doors.
The government has launched the Eat Out to Help Out Scheme to encourage people back into eateries in August by offering 50% off bills, but registration in the scheme has been lower than expected (25% of those eligible have signed up) and some would question whether patrons would want to ‘eat in’ whilst Covid-19 cases are still being recorded.
So, what can you do?
Find out what SMEs are around you and which have reopened to the public: if you feel you can patronise them while staying safe and following government guidelines, please do. For those businesses that haven’t reopened, find out if they have started an online service (try using this website – stockupsmall.com). We should be doing all we can to support local businesses during this time as there are many that depend on them, not only for providing goods and services to the local community but for their livelihood. There is no doubt the pandemic will have a lasting impact on communities but being aware of where we spend our money is one way we can influence how much the virus will change our communities for good.
The Keep Britain Working campaign is keen to find out more about the challenges of running a business during these times. Please take 3 minutes to complete this short survey.