A new report reveals the cost of Covid-19 to small businesses now sits at £109.6 billion, two years on from the UK’s first national lockdown – with one in six believing they will never recover financially from the pandemic.
The study by small business insurance specialist Simply Business reveals that 87% of small business owners have lost money over the last two years, averaging £20,981 each in total, with many still suffering financially. With one in six small business owners believing they will never financially recover from the pandemic, this represents almost one million UK small businesses in total.
While others are more confident of eventually recovering financially, the outlook remains bleak, with 43% of owners saying it will take at least another year. What’s more, one in five (21%) don’t expect to ever return to pre-pandemic trading levels.
Despite one in six (16%) believing that their business is now better prepared for the future following the events of the last two years, small business owners are now facing a unique set of challenges as we continue to emerge from the pandemic.
While Boris Johnson’s lifting of Covid restrictions earlier this year was predicted to give business a boost, 31% believe things have in fact got harder since the restrictions ended – with 63% believing that the government hasn’t offered enough financial support, consultation or communication in the period since.
Furthermore, as Covid cases rise again in the UK, two in five (38%) small business owners are concerned about another lockdown and tighter restrictions, which would impact trade exponentially for a third consecutive year. Two fifths (40%) say they are ‘not at all confident’ about their preparedness for a further lockdown or tightening of restrictions, and what’s more, a worrying 42% predict the temporary or permanent closure of their business should the UK enter another lockdown. There is however, a glimmer of hope amongst nearly a quarter (23%) of SMEs who have strong faith in their ability to weather another lockdown.
Alan Thomas, UK CEO at Simply Business, said: “Two years on from the UK’s first national lockdown, the continued impact of Covid-19 on small businesses is clearer than ever. With owners losing almost £21,000 each on average, one in six believe they will never recover financially from the pandemic.
“For small businesses, there’s no doubt that it’s been a period of incredible difficulty. But it’s also been a period of resilience, innovation, and creativity, where the unique spirit of the UK’s self-employed community has once again been clear to see.
“Accounting for over 99% of all UK businesses and contributing trillions of pounds in turnover every year, small businesses sit at the heart of our communities and are vital to our economy. As the types of challenges facing small businesses evolve, it’s essential that we all play a role in supporting their revival over the coming months and years.
“From local bakeries and greengrocers to contractors and tradespeople, if the UK is to recover from the effects of the pandemic, we need small businesses to bounce back.”
