Small business growth outlook collapses
In the short period of time since our last survey at the start of 2020 the latest findings from our quarterly tracking study of small businesses has reported UK small businesses “predicting growth” plummeting from 39% to just 14% in the last three months - with 31% of business owners scaling back their businesses and 30% saying they will struggle to survive between now and the end of June.
The bleak new data reveals the scale of the impact that the COVID-19 pandemic has had on the sector.
The industry sectors where small business owners most feared collapse were hospitality and leisure (50%), retail (40%) and transport/distribution (37%). For the first time, every industry sector recorded more business leaders predicting contraction or collapse than growth for the next three months
Reflecting on their current trading status since the outbreak of the COVID-19 in the UK, 32% of small businesses have temporarily closed, with just 1% so far closing permanently. Further, 34% have adjusted to a home working regime, 12% have transitioned to become online businesses and 4% have diversified their services in order to stay afloat. Around one in seven (13%) reported no change to their trading status.
The new data also revealed that the digital status of a business before the pandemic had a direct bearing on how it now saw growth prospects for the period to the end of June. Small businesses that were largely online at the start of the year were most likely to predict growth for the three-month period.
(28% compared to just 7% of offline businesses).
The current climate though has brought a sudden and seismic shift in confidence and outlook. Many small businesses have been unable to trade and many are having to revise growth forecasts as the whole supply chain has been shaken by the current period of lock-down.”
(The research was conducted by YouGov among a representative sample of 1,266 small business decision makers in April 2020 spanning industry sectors)