As the Coronavirus Pandemic continues to disrupt trade, 14 percent of small businesses predict financial challenges ahead.
One of the reasons for this, it seems, is poor cash flow. More than a quarter of the businesses we spoke to said they are continually chasing late invoices due to the Pandemic, with many more (22%) stating that Brexit could further delay payments. As we will see, the sectors most fearful of financial losses in 2021 span healthcare, the arts, and hospitality, with companies concerned about changes in consumer spending (21%).
Media businesses were the most foreboding when asked about the financial challenges faced in 2021 (23%).
It probably comes as no surprise that the performing arts sector expects the lion’s share of losses in 2021. While the opening of venues and theatres might go some way to repairing the damage caused in 2020, many are worried about whether Government provisions will tide them over until the curtains rise again.
Indeed, 24 percent of all businesses surveyed said they are worried about what support will be available should they stop trading due to further Coronavirus restrictions. Statistics also suggest 20 percent of companies expect to make a loss in 2021.
“2020 proved a challenging time for all businesses and unfortunately the uncertainty will continue into this year. However we have light at the end of the tunnel and hopefully life can start to go back to normal following the success of the vaccine roll out.
While the past year has been a struggle, one positive takeaway SMEs have is how the pandemic has led to many fast tracking their business in some way, whether it’s launching an area of the business they wouldn’t have otherwise or simply introducing new technology to help their service adapt to the climate. Businesses can take confidence from knowing how adaptable they have become, which will should give them assurance for whatever may come their way in 2021.”
Once again, the creative arts sector aired grave concern for making timely payments in 2021 (36%). But by far the most apprehensive are those working in insurance and pensions — 46 percent said they are likely to chase late invoices throughout the year.
Likewise, the charity space anticipates weak cash flow (42%) as unemployment rises, funding dwindles, and people have less disposable income.
I am continually chasing late payments to my business
Late payments have a worrying impact on my cash flow
I am worried about how Brexit could affect my cash flow
Statistics also show that very few small business owners understand the VAT and custom duty implications of Brexit (15%) — the hospitality sector seemingly most in the dark (6%).
I’m up-to-date with changes to VAT and customs duty requirements for Brexit
of hospitality and events management are up to date with changes to VAT and custom duty requirements.