Covid expected to cost small businesses £69bn

Losses from coronavirus could equal £69bn as an increasing number of businesses predict that they will stop trading in the coming months

The effects of COVID-19 could cost businesses £69bn, according to new figures from Simply Business.

That’s an average of £11,799 per business, made up of lost work, earnings and total revenue.

A worrying 67 per cent of businesses said they had to stop trading at some point in the past six months. There could be more to follow, as 14 per cent said that they’re likely to close in the next one to three months, 12 per cent believed they’ll be closed within the next three to six months and 11 per cent within six months to a year.

Small businesses fear a second lockdown with one in five (17 per cent) saying that they wouldn’t survive.

A large proportion of respondents (48 per cent) believed that it will take at least 12 months to recover the money lost due to COVID-19. A significant 12 per cent thought that it would take two to three years.

However, it’s not an entirely gloomy picture. Despite lockdown’s challenges, 85 per cent plan to remain self-employed and ten per cent plan to start businesses. Others have adopted new technologies – 47 per cent are using messaging apps, 33 per cent are using more social media, 36 per cent are taking contactless or online payments and 25 per cent have started online delivery services.

Many business owners are looking beyond the virus, with 75 per cent felt that they would either continue or restart their businesses after the situation settles. Over 20 per cent say they are ‘very positive’ about their business post-COVID.

But small business owners can’t survive on their own as Alex Thomas, CEO of Simply Business, explains: “The government has a clear duty to protect public health throughout the pandemic, but it’s obvious that any decisions – whether that’s on fiscal policy, further lockdowns, or future packages of financial support – will also have a huge impact on the rate of recovery for small businesses, and ultimately, the UK economy.”

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Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

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