For many UK business owners, it’s been a year to forget. The Coronavirus pandemic has catapulted countless companies into financial limbo, leaving many to wonder whether 2021 will be quite so challenging.
To fully understand the business challenges ahead, we surveyed 1,000 UK SME owners across 19 sectors. Here are the main challenges small businesses expect to face:
Unsurprisingly, Coronavirus restrictions (35%) and new Brexit regulations (19%) were the most significant concerns for small businesses going into the new year. In fact, so much so that 51 percent of SME owners stated that they are struggling to forward plan because of the current political landscape.
When we compare these figures to last year’s results, we see that there is slightly less apprehension towards ‘Talent’, ‘Logistics’, and ‘Technology’ — the latter of which previously accounted for 21 percent of answers. This may suggest that, while trading is at an all-time low, many businesses have acclimatised to their new surroundings.
We asked small businesses to share their top ten concerns across multiple sectors. From lockdowns to legislation, Coronavirus and Brexit predictably permeated the bulk of answers.
The top three causes for concern were:
• Lack of knowledge about Brexit legislation and requirements.
• Coronavirus regulations.
Let’s take a closer look at some of the hurdles businesses will try to overcome in 2021.
The creative arts and information technology sectors were the most concerned about coronavirus restrictions, with 47 percent stating that future trading curbs could be disastrous for their business. The only industries to show more apprehension towards Brexit (30%) than Coronavirus (21%) were the environmental and agricultural sectors.
But the majority of concern for Brexit came in finance, where accountants and banks stressed the need for greater knowledge surrounding new legislation (74%). Similarly, engineering and manufacturing businesses showed concern for changes relating to import and export regulations (43%).
It’s clear that many SMEs struggled to hold onto their staff or endured significant financial woes during 2020 — even with the help of the Government’s furlough scheme.
Worryingly, 30 percent of small businesses had to let staff members go due to the pandemic.
I used the furlough scheme during the pandemic
I had to let staff members go due to the pandemic
I am worried about what support is available if my business stops trading due to coronavirus restrictions
While 28 percent of business owners anticipated growth last year, we can see that the reality is far less fruitful: one in three companies are looking to close in 2021 (29%). Likewise, 18 percent of SMEs foresee selling their business, while 20 percent expect to make a loss — the performing arts sector, in particular (33%).
However, what’s encouraging is that 34 percent of small business say that they are agile enough to adapt as the pandemic progresses. There’s also a small proportion of companies, albeit only 8 percent, who expect to see growth in 2021.