Small firms returning to business as usual

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Date: 8 June 2021

Come in we're open, vintage retro sign in cafe front

Nine in ten small firms expect to be running at full strength by the end of this year but the British Chambers of Commerce has warned that further government support may yet be needed.

UK small businesses are increasingly confident in their ability to grow and recover after the pandemic, according to the latest survey of 1,000 businesses (mostly SMEs) by the British Chambers of Commerce (BCC) in partnership with Funding Circle.

The poll findings show that the majority (63%) of UK businesses are emerging from lockdown with either concrete plans or intentions to grow their business over the next 12 months. The manufacturing sector (68%) is particularly optimistic, while 58% of the hardest hit business-to-consumer firms, in sectors such as hospitality, catering and retail, also anticipate growth.

Although the UK economy is yet to fully reopen, many businesses are already back up and running. More than half (53%) said they had already restarted or returned to pre-pandemic levels in April, with a further 27% expecting to reach this milestone by October. By the end of the year, 91% of businesses expect to have fully restarted, with only 1% not expecting to restart for the foreseeable future.

Unsurprisingly, business owners polled say the biggest barriers to reopening are COVID-related, such as the risk of further lockdowns (cited by 38% of respondents) or social distancing requirements (cited by 37%). Concerns around reduced customer demand (33%), inflation pressure (18%) and recruitment difficulties (14%) are also weighing on UK businesses.

"The ability of businesses to bounce back from the devastation caused by COVID is a huge testament to their resilience,' said Claire Walker, co-executive director of the BCC. "There is cautious optimism growing among firms that as the economy now gradually unlocks, they will be able to push on and return to growth. But the shadow of COVID is very long; many firms still feel uncertain about what the future holds. Having access to finance to help them weather this continuing uncertainty may well prove vital."

The BCC is calling on the government to continue to offer reassurance to UK businesses. Walker said: "Firms will feel more confident and will be more willing to invest in jobs and in developing their business, if government can give assurances that a safety net of financial support will be provided should there be a need for restrictions which reduce or stop commercial activity in order to protect public health."

One business putting its growth plans into action is Bird & Blend Tea. Having shifted the business online during the pandemic, it is emerging from lockdown with plans to add two new stores to its 12 existing locations. Mike Turner, co-founder of Bird & Blend, said: "We've seen really positive signs since reopening with steady footfall, especially with the turn in the weather over the last week. We're continuing to follow all social distancing guidelines, which do present some challenges such as when sampling or smelling teas, but our teams have been able to find ways to do this safely in a way that still means customers can have a great experience. Now, we are proud to be actively working towards opening more stores on high streets around the UK."

Written by Rachel Miller.