A new report confirms that women-led SMEs suffered most in lockdown and highlights the survival issues facing many smaller businesses.
Women-led businesses fared worse in lockdown than those led by men, according to a new study which highlights the extent of the Covid-related pressures facing SMEs.
The study by King’s Business School is based on a survey of over 350 entrepreneurs at the height of the first Covid-19 lockdown. Sixty one per cent reported that the existence of their business was under threat due to a significant decrease in trading activities. The report estimates that potentially 16.6 million UK jobs are at risk if entrepreneurs cannot sustain their businesses.
The survey also found that around half were only planning for the next year and just over half predicted that they would run out of money within the next 12 months if the situation with regard to lockdown continued.
It found women-led businesses were impacted more adversely than those of men with 72% (vs. 56%) seeing their businesses experiencing lower trading volume.
There were some positives, however. Some entrepreneurs also anticipated an acceleration of their existing business, often tied to online services, with 16% of female entrepreneurs and 7% of male entrepreneurs expanding into online trading as a result of the pandemic. Others saw cost savings from increased remote working. Meanwhile, 44 per cent of entrepreneurs had volunteered their business’ services or products for good causes and half of those who donated time or products did so as a result of the pandemic.
Professor Ute Stephanwho led the research team alongside colleagues Dr Przemyslaw Zbierowski and Pierre-Jean Hanard said: “While entrepreneurs were optimistic and could see possible long-term positive impacts on their businesses, it was also clear that many were in survival mode.
“Entrepreneurs are agile, but there are only so many things they can do to keep their businesses afloat. With many parts of the country facing stricter lockdown, we urge the Government to help SMEs find ways to adapt and to build on their potential to ‘build back better’ as the backbone of a more inclusive and greener post-Covid UK economy”.
The report makes a series of recommendations, including creating new measures, such as small cash grants or ‘Covid Opportunity Vouchers’, to encourage SMEs to conduct smart experiments to test potential new products and services; the extension of loans; more focus on simple solutions to support SMEs’ move to digitalisation; encouragement for SMEs to integrate social engagement into their business models; and an improved focus on work life balance and mental health.