Last week, Redfield & Wilton Strategies conducted a comprehensive poll of over a thousand owners and directors of small and medium enterprises (SMEs) in the United Kingdom. In this article, we look at how SME owners and directors view the current coronavirus crisis and the restrictions that have been enforced by the Government.
Staying Open and Remote Work
Our poll found that 83% of SME owners and directors say their business is currently open in some capacity, with 35% saying their business is fully open and 48% saying their business is partially open. 17% say their business is fully closed.
Among those whose business is only partially open, fewer than half (47%) say that Government restrictions are the main reasons why they are not fully open. 39% say it is the effects of the coronavirus pandemic on their business that prevent from being fully operational. In other words, factors such as a fear of contracting coronavirus themselves, reduction in customer demand, and staffing shortages are preventing these owners and directors from reopening, rather than restrictions specifically imposed by the Government. These figures are significant as they show how reducing Government restrictions is not a panacea for restoring business activity, particularly if the pandemic continues to run rampant.
Among the 17% of SME owners and directors who say their businesses are currently fully closed, 62% say that Government restrictions are the primary reason why they are fully closed. Meanwhile, 26% point to the effect of the pandemic on their business.
Even so, 44% of SME owners and directors whose business is currently closed would not reopen if the Government relaxed restrictions tomorrow. Once again, these figures highlight that demand factors and health concerns are almost as responsible for the temporary closure of SMEs as Government restrictions—or at least such appears to be the view of a number of their owners and directors.
In fact, only 37% of those whose business is closed say they would feel safe reopening their business.
When we asked SME owners and directors to select the main obstacles (up to three) to the growth of their business in the next three months, we nevertheless found that almost half (46%) did select coronavirus restrictions as one of their main obstacles to growth. On the other hand, 28% pointed to a lack of demand and 23% to the public’s fear of contracting coronavirus. Tied in third place was also Brexit, with 23% of SME owners and directors identifying it as one of the obstacles to their business growth in the coming three months. Other issues such as taxation, tariffs, access to financing, or debt burden were selected by fewer SME owners and directors.
Among those SME owners and directors whose businesses are currently open (whether fully or partially), remote work has been essential in allowing them to continue to operate. Our poll finds that 44% of them have been operating fully (or almost fully) remotely, whereas a further 39% are operating on a partially remote basis. Only 17% of them are operating fully in person. Putting our figures together, we find 69% of all SMEs in the United Kingdom reportedly working remotely in some capacity.
Most SME owners and directors, it appears, have generally found remote work to be more or equally as productive as their regular non-remote operation. According to 44%, remote work has been more productive than working from their usual place of business, and 36% say it has been equally as productive. Only 19% consider that it has been less productive.
This result mirrors our finding among the general public. In a poll conducted on 18 January, 47% of those employed or self-employed in Great Britain who have been working from home during the pandemic say working from home has been more productive.
The advantages of remote work for businesses mean that it is likely to remain a set-up of choice in the aftermath of the pandemic: our poll found that 75% of SME owners and directors who are currently working remotely expect their business to continue with remote work after the pandemic, whether fully or partially. Only 25% of those currently working remotely do not intend for their business to continue this way of working after the pandemic ends.
For now, 57% of those currently working remotely say they would feel unsafe returning to fully working in person.
Coronavirus Pandemic Outlook
Thinking more broadly about the timeline of the pandemic, the expectations of SME owners and directors are closely aligned with the expectations of the British public as a whole. For example, 48% of SME owners and directors think the worst of the pandemic is yet to come, whereas 31% think the worst is already behind us. Similarly, we found 49% of the British public as a whole thinks the worst is yet to come and 29% thinks the worst is already behind us.
Likewise, the general public and SME owners and directors have very similar views when it comes to the value of the current Government restrictions in place: 60% of the British public thinks the current restrictions are more helpful to society than they are harmful, a view shared by 58% of SME owners and directors. Even so, our figures do suggest that a slightly higher proportion of SME owners and directors (30%) than general respondents (23%) are likely to say the current measures are more harmful than they are helpful.
A possible explanation for why SME owners and directors are as supportive of Government restrictions despite the impact on their business is that they have been exposed first-hand to the virus through their business. Indeed, our research finds that 46% of SME owners and directors say they or their employees have had to take time off at some point due to contracting or testing positive for coronavirus.
Likewise, 51% of SME owners and directors say they or one of their employees has had to take time off because they came into close contact with someone who tested positive for the virus and therefore had to isolate.
In comparison to the general public, SME owners and directors are slightly more likely to feel safe carrying out a variety of activities. Even so, a strong majority of SME owners and directors would feel unsafe.
Similar numbers of the general public as the population of SME owners and directors consider it a genuine possibility that they may contract coronavirus upon leaving their homes.
SME owners and directors are only somewhat more likely than the general population to view the coronavirus crisis as being primarily an economic crisis at this point, as opposed to a public health crisis. Whereas only 17% of the British public views it as a primarily economic crisis, the proportion rises to 26% among SME owners and directors. Conversely, 71% of the general public views it primarily as a public health crisis, compared to 63% of SME owners and directors. Notwithstanding these slight differences, it is important to underline that almost two-thirds of SME owners and directors do think of the ‘coronavirus crisis’ primarily as a public health crisis at this stage.
Interestingly, SME owners and directors are much more optimistic than the British public as a whole that the coronavirus crisis will be over in a year’s time. Whereas only 36% of the public as a whole think the crisis will be over in a year’s time, this view is held by 49% of SME owners and directors.
Survival and Financial Support
The vast majority (81%) of SME owners and directors are confident that their business would be able to survive if the current restrictions last another three months. On the other hand, a concerning 19% think their business would not survive—a worrying figure, even if a minority.
A further third believe the financial situation of their business will worsen in the next three months––though 20% think their business’s financial situation will improve.
The proportion of SMEs that expect revenue to increase, decrease, and stay the same is broken roughly evenly in thirds.
Part of the reason why the majority of SME owners and directors are confident they could survive another three months of lockdown is the general consensus (shared by 67% of SME owners and directors) that the Government has made enough financial resources available to their business to allow them to survive the coronavirus crisis.
Indeed, more than half of SME owners (56%) and directors say they have applied for government assistance, of which the vast majority have been successful.
When provided with a list of Government support programmes made available in the past year, only a third selected that they made use of ‘none of these.’
Approval of the actions taken by Chancellor Rishi Sunak appears very high among SME owners and directors, with 64% agreeing that he has made sound financial decisions for the UK since the onset of the pandemic. Only 15% of SME owners and directors disagreed with this statement.
This number drops to a still high 51% when the statement is specified to ‘businesses like my own.’
Thinking about the level of Government spending, about half of our sample deemed it to be ‘about right.’ However, a notable 22% find the level of spending to be ‘too much.’
Ultimately, our poll of over a thousand SME owners and directors in the UK indicates that most of them think the current Government restrictions are more helpful to society than they are harmful, and that the Government has provided enough financial support for their business to weather the crisis. Likewise, many of them point out that lack of demand and the public’s fear of contracting coronavirus are major obstacles to the growth of their business, independently of Government restrictions. Fortunately, the vast majority of SME owners and directors think their business can withstand another three months of the current restrictions. However, for the 19% who think their business cannot survive another three months and the 33% who think the Government has not made enough financial resources available to their business, the next few months will be extremely challenging, and their plight could lead to a reduction in the number and prosperity of SMEs in Britain.