Back from the brink: 46% of SMEs contemplated closure in 2020; now it’s just 1%
Todd Davison
Further lockdowns are the number one worry for the owners and directors of UK SMEs but 53% are cautiously optimistic about the year ahead and 22% are very optimistic, according to a survey of 1,000 SME owners and directors by Purbeck Personal Guarantee Insurance.
Worries about Brexit are also keeping SME owners and directors awake at night. This supports the latest Business Insights data from the ONS showing that paperwork remains a top challenge faced by businesses for importing and exporting. 27% said Brexit was their top concern, while 18% ranked late payment by customers as their most pressing worry.
While 49% of SME owners and directors hope to keep their business on an even keel this year, 36% are planning for growth. Only 1% are considering closing their business in 2021 – which contrasts dramatically with the 46% who confessed they had considered closing for good in 2020.
When it came to any positives that have come from the pandemic, the biggest was the strengthening of employee relationships (34%) followed closely by improvements to business/customer relationships (31%). 29% said the pandemic had made them leaner and more agile and 12% said it had enabled them to find new income streams.
Todd Davison, managing director of Purbeck Personal Guarantee Insurance said: “We are not out of the woods yet but with some certainty over the lifting of restrictions on 19th July, SMEs are generally in a better position to plan their finances based on what they hope to achieve in 2021 – over a third want to grow their businesses this year.
“The ability to plan and focus on the future after 18 months of massive uncertainty is reflected in the reported levels of optimism amongst SME business leaders. The ONS Business Insights data shows that 88% of businesses are now trading, the highest percentage since comparable estimates began in June 2020, however for 30% this is below their usual capacity.
“While we back the calls for Government help for small businesses to cover the 18-day window between financial support winding down and the lifting of restrictions, it is quite likely that these businesses will need to find ways to stand on their own two feet during this period. Maintaining dialogue with lenders, creditors, suppliers and customers will remain vital.”
Purbeck Insurance Services
www.purbeckinsurance.co.uk
