Four in five (80%) UK SMEs are confident they will recover from Covid, according to research from digital bank Starling and the Great British Entrepreneur Awards (GBEA)
Despite last week’s warning from the Chancellor Rishi Sunak of hard economic times ahead, the findings suggest that many SMEs are feeling positive about the future and their ability to bounce back.
Their outlook also appears to be improving as lockdown continues to ease, with three quarters (75%) of business owners saying they feel more confident than they did a month ago.
Nearly two in five (39%) firms have changed their line of business to survive the impact of the pandemic. Of this group, many have shifted their business model by going online, prioritising digital products and setting up delivery services.
One farmer even set up a ‘Goats for Zoom calls’ service which allowed customers to ‘hire’ goats to appear in their work video calls. It has raked in more than £20,000.
However, there is no doubt that Covid-19 has been a worrying time for SMEs. One in five (20%) business owners said they have considered closing as a result of the pandemic and nearly two thirds (63%) have seen a decline in revenue, with 19% making no profit at all during lockdown.
The research also shows that many business owners have had to make tough decisions during the crisis, with a third (30%) using their own money to keep the business afloat and a similar number (33%) being forced to furlough staff. More than a fifth (21%) are not confident they can pay their bills each month.
It’s clear that these pressures are taking their toll on business owners, with two thirds (66%) saying their mental health has suffered as a result of the pandemic impacting their business.
Anne Boden, founder and chief executive of Starling Bank, said: ‘Small businesses are essential to the nation's efforts to build back the economy as we emerge from the coronavirus crisis. Despite the challenging conditions they face, it's heartening to see that many are proving so adaptable and resilient.’
The survey of 314 UK SMEs across a range of sectors also found that two thirds (68%) of the business owners questioned believe they will return to pre-Covid levels or better by 2021.
Francesca James, GBEA founder, said: ‘In the face of the disruption caused by Covid-19 and the emergence of a radically altered landscape, I’ve been inspired by the innovation, spirit and tenacity of the entrepreneurs we work with in coping with this unprecedented situation.
‘However, it’s been a deeply troubling time for so many SMEs and they need support now more than ever to create the wealth and jobs that are needed over the next few months.’