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Covid-19 Impact on Small Businesses in the UK
We conducted a survey of over 3,700 self-employed individuals and small business owners for our SME Confidence Report in the UK. We came to a realisation, that while every part of the country has been affected by the coronavirus, the severity depends on the region. Cost to small business was highest in the North East […]
We conducted a survey of over 3,700 self-employed individuals and small business owners for our SME Confidence Report in the UK. We came to a realisation, that while every part of the country has been affected by the coronavirus, the severity depends on the region. Cost to small business was highest in the North East and Scotland. While the average lost earnings for small to medium enterprise across the United Kingdom was £11,779. However, we discovered that the North West and Scotland were hit harder than any other place. The average loss of income, including loan repayments, lost earnings and work amounted to £15,039 in the North East, and £15,483 in Scotland. Here are the numbers for loss of income by region:
  • Scotland- £15, 483.
  • London- £17, 074
  • Wales- £11, 804
  • North East- £15, 040
  • North West- £11,495
  • South East- £13, 754
  • South West- £10, 989
  • The Midlands- £11,080
South West England has experienced the least closure of businesses, and also, the least impact from the virus.

Lost Income and Its Effects

In regard to lost income, it not only comes almost £800 below the average, but it is also experienced the least business closures. Compared to the national average of 4%, only 2% of respondents in the South West region have been forced to permanently close down. South East England is in the same boat, with 3% of small businesses shutting down permanently due to the pandemic. Region percentage of businesses that have closed for good:
  • 7% in London
  • 5% in Scotland
  • 6% in North West England
  • 4% in the Midlands
  • 4% in Wales
  • 4% in North East England
  • 3% in South East England
  • 2% in South West England
South West England is unsurprisingly the region that is most confident about resuming businesses to normal. 78% in the South East and 79% in the South West region intend to continue as things go back to normal. The percentage of businesses that intend to resume as normal are:
  • 79% in the South West
  • 78% in the South East
  • 76% in the North West
  • 76% in Scotland
  • 75% in the North East
  • 74% in Midlands
  • 74% in Wales
  • 70% in London

London is a Vital Hub for the Growth of SMEs

London has always been a hub for small to medium businesses activity, and that's primarily why it has been the most affected by the pandemic. In addition to reporting the highest loss of income in the UK, SMEs in London are also the most like to permanently close, at a staggering 7%. However, small businesses in London have ideally reported the lowest rate when it comes to temporary closures. With 61% compared to the national average-67%. Also, it appears that London will be especially important as the pandemic dies down, with 15% of businesses owners saying they intend to start a new business after the pandemic.

Small Businesses Stay Resilient

According to our UK CEO, Alan Thomas, no region in the United Kingdom has been able to escape the impact of the pandemic, and the financial impact across the nation is worrying. Small to medium-sized businesses in the capital will be enduring a cost of at least £17,000 each, which is about £5,000 higher than the national average. The financial impact of the coronavirus is by no means small. However, the resilience and optimism shown by small business owners is certainly encouraging and inspiring. Working together to provide a service for their local community FindYourFleet  a home food delivery service,has found themselves being paid back with orders coming through on an hourly basis from the public doing their part to keep small business's going.  With most of them planning to continue or re-open their businesses, others are even planning to open new businesses. As such, we can expect confidence to gradually rise as we endure the various stages of lockdown. And there you have it, a closer look at how Covid-19 has affected businesses in the UK and what seems to be the future for SMEs.  

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