The coronavirus pandemic has unquestionably wreaked havoc on societies the world over. Small business operators especially are experiencing fiscal, physical, and psychological difficulties because of the crisis.
Micro-entrepreneurs in the UK are faced with other challenges too. A survey of 1000 business persons found the most significant burdens to be the effect of Brexit on trading opportunities, government regulations around the coronavirus, and technological know-how. These findings are arguably applicable to most SMEs around the country.
The UK’s desire for sovereignty from the European Union has had dramatic effects on the social and economic tableau of the country. Small commercial enterprises operate in a context that is in flux. Volatility is visible along the supply chain and in the arena of customs duties.
These mercurial circumstances do not inspire confidence in most owners. Most feel hobbled in terms of deploying long-term strategies because of the furore surrounding Brexit.
Generally, many businesses are finding it tough to stay abreast of changes to VAT structure and import-export duties. Smaller organizations honestly do not know what is going on in the country anymore. One group has benefited from this lacuna of knowledge – accountants. Smaller firms wanting to remain on the right side of the law are turning more and more to accountants to keep them updated on how Brexit will specifically impact their affairs.
Mental & Financial Strains
The COVID-19 crisis has rightly restricted movement in society. Though there are health benefits to be gained, the toll of the lockdown on business affairs is not negligible.
Going to work at a physical office space was stricken from most people’s daily routines. Despite this, about three-quarters of small-scale enterprises in the manufacturing, environmental, and agricultural sectors found themselves keeping even longer business hours than usual.
Unable to maintain clear boundaries between home life and work life, owners of small firms have been working these unsustainable hours to keep pace with adjustments that will help their businesses remain pandemic-compliant.
An unavoidable fiscal worry is what cash flow will look like for most small British businesses. The concern is not unfounded but one way to get peace of mind amidst these uncertainties is to a stable financial future by making continuous contributions to pension schemes to ensure emotional and mental well-being.
Since the start of the pandemic, the number of late payments has drastically increased. Wallets are tighter, making it less likely that smaller firms will receive compensation for their goods and services on time. The combination of Brexit-related supply chain disruptions and delayed payments for goods and services rendered is a poor one for the sustenance of any business, let alone smaller enterprises.
Financial challenges have also shown up in human resources. Many owners have had to cut costs by suspending hiring. Some have had to put a hold on salaries to maintain liquidity. In some upsetting cases, sole traders have had to lay off cherished staff members to make ends meet.
In sum, small business owners face fierce financial woes that affect their mental well-being.
Merchant Machine conducted a study that showed that the coronavirus pandemic has greatly hastened the rate at which cashless payments will become the societal norm in the UK.
To remain COVID-compliant, many responsible business owners transitioned from cash payments to cashless ones – e-wallets, card payments, etc. In this way, they could minimize contact with – and diffusion of – the virus.
Adopting technology in such a positive fashion is a healthy response given the fact that, according to the Takepayments survey, staying on top of trends was a chief source of stress for about 13% of small businesses. The majority of small enterprise owners have turned the current cashless state of affairs into business acumen. Organizations in the IT sector, for example, have pivoted towards producing creative, memorable online events that get their customers talking. Positive talk tends to find its way onto social media, where proprietors gain from delightful customer engagement.
But not all vendors are making the most of technology. Cultivating an active online personality is not everyone’s bailiwick. A significant number of business owners do not feel savvy enough to take advantage of all the opportunities that “going virtual” provide. Traders especially lamented not spending enough time in 2020 studying the nuances of digital marketing campaigns in preparation for 2021.
More than a third of small businesses feel that they are flexible enough to handle any further changes the coronavirus crisis throws their way. They are no doubt invigorated by government schemes such as rent protection and income support. The former keeps renters safe from eviction, while the latter assists the self-employed with a 2-month grant.
Though challenges abound, hope is not lost. Encouragement resides in many unexpected places. The UK’s SMEs have had to make a lot of tough decisions. The changes brought about by these processes will likely last beyond the pandemic.