The majority of small businesses expect their revenues to drop dramatically as a direct result of the outbreak of Coronavirus, according to a new study.
In an online survey of more than 1,000 businesses conducted by Small Business Britain – the UK’s leading champion of small businesses – with Professor Tim Vorley of Sheffield University Management School, almost three-quarters (72%) said they expect their revenues to reduce by more than 50% as a result of COVID-19 disruption. A further one in five expect a reduction of more than 20%.
As well as significant damage to revenues, the Small Business Britain statistics found that more than nine in 10 (93%) of small businesses have no relevant insurance as a safety net to recover lost revenue.
The survey revealed that overwhelmingly, the greatest concern small businesses have is cashflow (88%), with more than half (52%) also concerned about a reduced demand for their services.
The concerning figures come in the wake of the Government’s latest advice around the coronavirus, encouraging the public to avoid non-essential contact.
With such a high-level of concern around the finances and day-to-day activity of their businesses, small business owners have taken limited steps to put in contingency plans: one in three (31%) will ask their staff to take unpaid leave and a similar number will reduce their employees’ working hours. Just over one-quarter (27%) are considering moving their business online.
As small businesses look for routes to survival, only 17% have so far sought advice in areas such as financial planning, business resilience and digital skills.
Michelle Ovens MBE, founder of Small Business Britain said: “It is incredibly helpful to organisations like our own to identify the areas where small businesses need the most help, so we can provide that assistance. It’s not surprising small businesses are concerned by the coronavirus outbreak but seeing the figures laid out like this truly puts into perspective how damaging the long-term disruption will be.
“While financial aid goes some way to assisting businesses, there is a need for ongoing business support in areas such as financial planning, business resilience, marketing, strategic planning and digital skills. One of the most important things any small business can do right now is to ensure they have the adequate skills to move aspects of their operations online; this may well be the key to preventing job losses and ensuring customers remain engaged with their products and services over the coming months.”
Professor Tim Vorley, deputy dean at the Sheffield University Management School, said: “Right now, there may not be much comfort to small business owners concerned with their cash flow, their revenues and a loss of customers – as well as with their own health of course – but I want to urge small businesses to remember that there are support networks out there who can provide help with business resilience and help to mitigate their losses.
“We therefore want to encourage all those working in and leading the small business sector to both offer and reach out for support. It is critical that those who have the resources to come through this crisis lend a hand to small businesses who are struggling. It is concerning how few small businesses have the safety net of insurance, and they will need all the help they can get.”