Small businesses paralysed by mixed messages and uncertainty as UK unlocks
SMEs are in a state of paralysis and feel unable to plan their financial future, according to a survey from ACCA UK (the Association of Chartered Certified Accountants) and The Corporate Finance Network (CFN).
A total of 77.8% of accountants’ small business clients are not expecting to return to pre-COVID levels of production and turnover for at least a year, raising questions about their confidence and willingness to invest.
And only just over a quarter (26.8%) have made plans for surviving another lockdown, despite the worrying increase in the so-called Indian variant of COVID-19.
While some small enterprises have been able to reopen in the last month, such as pubs and cafes for outdoor service, 33% of respondents reported early trade was lower or much lower than expected, with 22% saying it met their expectations.
In the longer-term outlook, only 16% of micro businesses have made permanent changes to their business strategy in the light of the global pandemic, despite the effects of the health crisis posing fundamental threats to some sectors.
The survey reported data from accountants representing 10,839 SME clients and ran until yesterday.
Claire Bennison, head of ACCA UK, said: ‘We see a clear theme emerging from our accountants and their small business clients. A lack of clarity in government messaging and the slow pace at which some support schemes are currently rolling out are leaving them in a state of paralysis.
‘The unintended consequence of this uncertainty is to leave them lacking confidence in their ability to secure the financing necessary to get back up to speed as quickly as possible.’
Kirsty McGregor, founder of The Corporate Finance Network, said: ‘Current recovery schemes are moving much too slowly for small businesses and there is widespread confusion in various sectors about what the government will do next.
‘The temptation is for small business owners to remain cautious and delay investment, which will only postpone a return to normal trading. There will inevitably be insolvencies in the coming months, but some of those will be avoidable if owners are able to examine whether their business strategy is still suitable for a post-COVID world.’
ACCAis the Association of Chartered Certified Accountants. We’re a thriving global community of 227,000 members and 544,000 future members based in 176 countries and regions that upholds the highest professional and ethical values.
We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.
Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.
Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.
Find out more at accaglobal.com
About The Corporate Finance Network
The Corporate Finance Network – www.thecfn.org.uk – consists of some of the most proactive and commercially astute regional, independent accountancy firms in the UK. They specialise in providing corporate finance advice for smaller transactions. Kirsty McGregor can be contacted at [email protected]
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