Cost Of COVID-19 For UK SMEs ‘More Than £126.6 Billion’

Posted by Liz Seyi on April 22nd, 2021

A sobering reminder of the heavy financial cost of the coronavirus pandemic has been issued by a leading small business insurance provider, a year on from the imposition of the UK’s first national lockdown. 

Specifically, research revealed that the country’s small to medium-sized enterprises (SMEs) have so far lost an average of £15,673 in earnings as a consequence of the pandemic and the associated restrictions on national life. 

This compares to the £11,779 that UK small business owners had originally estimated the crisis would cost in May 2020. It means that the total cost of the pandemic for such businesses is set to be more than £126.6 billion – over twice the £69 billion initially projected a year ago. 

Small businesses still fearful of further COVID-19 losses

A “roadmap” has now been set out for the gradual reopening of the UK economy after the latest lockdown. However, the findings of the survey by Simply Business indicated that small business owners are well aware of the continued damage the coronavirus situation is set to cause to their firms. 

Indeed, 12 months after the initial nationwide lockdown started, SMEs responding to the survey indicated that they feared losing a total of £22,461 each on average. Nearly a tenth – 8% – of those quizzed even said that they expected the pandemic’s total cost to their business to surpass £50,000. 

The poll findings also revealed that more than 840,000 SMEs were unsure of whether their firms would ever return to pre-pandemic levels of trading, in what represents a hugely worrying development for small businesses and the wider UK economy. 

After all, as pointed out by LondonlovesBusiness – which reported the findings – SMEs make up more than 99% of the country’s businesses, as well as a third (33%) of employment and just over a fifth (21%) of all economic turnover. A slow recovery for such businesses, then, could greatly compromise the nation’s efforts to return to sustained economic growth. 

What else did the research findings show about SMEs’ experiences and attitudes? 

The above discoveries were far from the only ones illustrating what a dire experience small businesses in the UK have had of the COVID-19 crisis. 

It was also revealed, for example, that 81% of SMEs felt they hadn’t received adequate support from the government, with 41% stating that they didn’t feel supported at all. More than 2.2 million SMEs – accounting for 37% of the six million such businesses in the UK – apparently haven’t been able to access government schemes and grants. 

Looking to the future, there were mixed views among the SMEs polled on what the government’s “roadmap” for releasing lockdown meant for them. About half – 54% – of those surveyed believed that the plans laid out gave them some level of reassurance to start planning the future of their business. However, this still left some 46% of small firms uncertain about what the coming months could hold for them. 

With regard to recouping the money lost during the pandemic, 18% of respondents expected that this process would take them from 18 months to two years, while 20% suggested they would require two to three years to get back the money they had lost. A fifth – 20% – of those quizzed indicated a probable wait of three years or more. 

Overall, more than half (53%) of SMEs were still worried about the future of their businesses, but hoped to survive until the end of this year. 

Don’t look further when you require an affordable bookkeeper in Wellington or Plymouth 

As leading providers of flexible digital bookkeeping services here at Britebooks, we’re well-placed to appreciate ourselves just how resilient small firms across Somerset and Devon have proved to be, in the face of the stiff challenges posed by the COVID-19 pandemic. 

While the crisis is certainly not over yet, much of the focus for businesses in and around our region has now shifted from survival to recovery. 

To learn more about the difference that a highly capable, knowledgeable and affordably priced bookkeeper in Wellington or Plymouth could make to your business in 2021 and beyond, please don’t hesitate to contact the Britebooks team today.