Investing in new people: biggest concern for small firms who are unable to get financial support
At a time when small businesses are doing what they can to mitigate the impacts of the Coronavirus, our Barometer asked a nationally representative sample size of 1,306 small firms whether they would be able to grow without the help of finance over the next year.
Over one in two (53%) said they would not be able to expand or grow their business without additional support – a figure that rose to 76% for small business who said they were already contracting and scaling down.
% of small businesses who would be unable to expand in the following areas without additional support
Increase headcount/ hire new people
Launch new products/ services
Compete with larger competitors
Modernise IT capability/ purchase new IT equipment
Run a marketing/ advertising campaign
Move to a better location/ bigger space
Invest in new vehicles
Invest in new production lines/ machinery
Invest in a new company brand/ website
Launch into new market segments within the UK
Invest in staff training programmes
Launch into new markets outside the UK
Pitch for major accounts
Pay suppliers on time
Pay our tax bills
Concerns for sectors
In particular the hospitality and leisure sector – who are already having a hard time recruiting after lockdown – said that without additional financial support they would struggle increasing their headcount (33%) and investing in staff training programmes (27%). Whilst almost half of small firms (47%) in the manufacturing sector said that without borrowing money they would be unable to invest in new machinery and a further 30% said that without help they would not be able to move to a better location or bigger space in the next 12 months.
Whilst we have seen a lot of optimistic news in the headlines of small businesses getting back on their feet and of the economy ramping up again it is important to remember the way the pandemic decimated so many small organisations in the UK over the past 15 months. Small firms need more help than just a bit of sunshine to truly rebuild their businesses in the new era. In light of recent reports of a national labour shortage it is crucial that UK SMEs are given the support they need to recruit the best people possible in order to expand and grow over the next 12 months.