Supporting small businesses to recover and thrive

Man­ag­ing crises is par for the course in a small busi­ness. There are the every­day ones – clients hold­ing up pay­ments, unex­pect­ed staff absences, sup­pli­ers fail­ing to deliv­er – and then there are nation­al crises like the one we cur­rent­ly face, which hit the entire busi­ness com­mu­ni­ty and wider soci­ety as a whole often, sad­ly, with trag­ic con­se­quences.  

In such cir­cum­stances, we small busi­ness own­ers have no choice but to adapt to try and secure the futures of the 17 mil­lion peo­ple who work in small firms across the UK.  

From the out­set of the coro­n­avirus cri­sis, we recog­nised cus­tomer safe­ty and the well­be­ing of our com­mu­ni­ties had to be start­ing points for adjust­ments; respons­es to longer-term eco­nom­ic shifts wrought by the pan­dem­ic could come lat­er.

How small businesses are responding to the pandemic

When we spoke to Fed­er­a­tion of Small Busi­ness­es’ mem­bers dur­ing the first nation­al lock­down, we found the major­i­ty were play­ing a proac­tive role in sup­port­ing their local com­mu­ni­ties. As part of their efforts, close to one in four were help­ing key work­ers – sup­ply­ing per­son­al pro­tec­tive equip­ment, vol­un­teer­ing and pro­vid­ing accom­mo­da­tion – and a sim­i­lar pro­por­tion were mak­ing dona­tions to food banks.

We also found that those who were per­mit­ted to stay open were shelling out sig­nif­i­cant­ly, typ­i­cal­ly thou­sands of pounds at a time, to ensure their premis­es were safe for cus­tomers. Mon­ey which, it should be said, they have not been able to claim back.

And then there were those who were already think­ing about how the cri­sis will change the busi­ness land­scape over the long term and respond­ing accord­ing­ly. Around one in six were devel­op­ing their online pres­ence or estab­lish­ing one for the first time. One in ten had start­ed devel­op­ing new ser­vices and dou­ble that num­ber had start­ed offer­ing free home deliv­er­ies, pri­ori­tis­ing avail­abil­i­ty to the most vul­ner­a­ble when doing so.  

What are the next steps?

That was the ini­tial response. The ques­tion now is what steps should be tak­en from here to ensure small firms can con­tin­ue to hire, inno­vate and be at the heart of com­mu­ni­ties?

Thank­ful­ly, chan­cel­lor Rishi Sunak was swift and ambi­tious in com­pil­ing an ini­tial res­cue pack­age in the spring: income sup­port schemes, loan guar­an­tees, cash grants, HM Rev­enue & Cus­toms defer­rals and tax breaks amount­ing to bil­lions in direct sup­port. His brave response, and sub­se­quent enhance­ments of sup­port mea­sures, have paved the way for an eco­nom­ic bounce back.  

In future, these efforts will need to be fine-tuned to enable entre­pre­neurs to cap­i­talise on the trends that are set to shape our econ­o­my over the next decade. 

Two that imme­di­ate­ly come to mind are an increased ten­den­cy to work from home or remote­ly and an accel­er­at­ed shift towards ecom­merce and the online pro­vi­sion of ser­vices.  

There’s a clear com­mon denom­i­na­tor where mak­ing the most of these behav­iour­al changes is con­cerned: good broad­band con­nec­tiv­i­ty. Unfor­tu­nate­ly, we are cur­rent­ly lan­guish­ing in 47th place in the World­wide Broad­band Speed League. Mov­ing up that table should now become a key pri­or­i­ty for the gov­ern­ment. 

Also we have to recog­nise the exist­ing upward trend in unem­ploy­ment will con­tin­ue until at least the end of this year. As such, we need to encour­age more of those who are out of work to think about start­ing their own enter­pris­es that are alert to changes now tak­ing place.    

We already have the very suc­cess­ful New Enter­prise Allowance and Start­up Loan pro­grammes. Now is the time to go one step fur­ther with the cre­ation of a Kick­start Start­up pro­gramme, mod­elled on the Kick­start employ­ment ini­tia­tive.

Adapt­ing when faced with crises is a fact of busi­ness life. Sup­port­ing us to do so today will enable us to pro­tect com­mu­ni­ties and liveli­hoods tomor­row.