“The Next Normal” Covid-19 Impact on British Business
In this week’s blog, we’ll examine how British Business has been affected by the Covid-19 pandemic, the lockdowns, and subsequent restrictions.
In March 2020 the world was turned upside down by the Covid-19 pandemic. The world was at a standstill for months. In the UK, British businesses were closed and workers were asked to work remotely during the various lockdowns throughout 2020 and into 2021. British businesses, like their international counterparts, in many cases, had to close their doors. For other businesses, it was a case of changing the way they operated simply to keep their business running during these unprecedented times.
Many businesses have suffered financially as a direct result of the pandemic, with the British government putting in place numerous schemes and grants to help British businesses to get back on their feet.
There is of course the Recovery Loan Scheme which we wrote about in our blog back in December. And earlier this month the Government launched a grant scheme of over £700 million that will be distributed to local authorities throughout the country to help British businesses that have been affected by the Omicron variant of the virus.
Trading and Cash Flow
Despite the ongoing pandemic, most British businesses have opened their doors again as we return to a new form of normality. In early January 2022, the Office of National Statistics reported that 91% of businesses across the UK were trading, with 77% fully trading and 14% partially trading.
However, since December 2021, 32% of all businesses that are currently trading, have reported a decrease in turnover compared with their normal expectations for this time of year. There are of course particular sectors that have been significantly impacted, not least those in the leisure and accommodation sectors; whilst the foodservice industry has reported a 26% decrease in turnover during this period.
As we mentioned in last week’s blog the government has responded to this issue by creating the Omicron Hospitality and Leisure Grant which provides funding for those businesses in the leisure and accommodation industries that are most in need.
Of all businesses that have reported a decrease in their turnover over the past month, 53% stated that the Covid-19 pandemic was the main reason for the change, whilst 12% stated that a combination of the pandemic and the end of the Brexit transition period were the main reason.
The construction industry has also been hard hit over recent months. In January 2022, 15% of all businesses working within the sector reported that they have no current cash reserves.
Meanwhile, taking a broader view across all sectors, 40% of businesses indicate they have less than three months of cash reserves. Indeed, many businesses functioning in the leisure industry are struggling to see how they will survive over the next three months.
Despite this, many medium-sized businesses (those with ten or more employees) have reported a growing confidence, saying they will continue to function and in some cases thrive in the coming months.
So what next?
The “Next Normal”
With the government removing and reducing restrictions throughout the country, the roll-out of the booster vaccine continuing and the easing of restrictions for international travel into the country with the removal of mandatory testing, the future is beginning to look brighter for British businesses, particularly within the tourist sectors.
The British government is also providing several funding schemes and grants for those businesses hardest hit by the pandemic to help them through these difficult times and to get them back on track post-covid.
With many predicting a drop in unemployment this year, the future for British business may be difficult for the next few months, but it is not entirely bleak as businesses begin to adapt to the “next normal”.
And part of not only ‘surviving but thriving’ includes making sure your business is properly funded. If you need funding, or you require further cash reserves to see you into the summer period, then Funding Track is here to help.
Our team of business finance specialists are on hand to help you navigate the complexity of funding options that exist post-pandemic.
Contact our team today.
T.020 3857 3030