SMEs are in a state of ‘paralysis’ according to the latest findings from Association of Chartered Certified Accountants UK (ACCA) and The Corporate Finance Network (CFN) SME Tracker.
Non-essential retail and outdoor hospitality were recently given the green light to reopen. However, 33% of respondents reported early trade was lower or much lower than expected.
The ACCA found that 77.8% of accountants’ small business clients are not expecting to return to pre-Covid levels of production and turnover for at least a year.
In addition, 6.8% have made plans for surviving another lockdown, despite the worrying increase and uncertainty surrounding the Indian variant of Covid-19.
In the longer-term outlook, only 16% of micro businesses have made permanent changes to their business strategy in the light of the global pandemic, despite the effects of the health crisis posing fundamental threats to some sectors.
Kirsty McGregor, founder of The Corporate Finance Network, said: “Current recovery schemes are moving much too slowly for small businesses and there is widespread confusion in various sectors about what the government will do next.
“The temptation is for small business owners to remain cautious and delay investment, which will only postpone a return to normal trading. There will inevitably be insolvencies in the coming months, but some of those will be avoidable if owners are able to examine whether their business strategy is still suitable for a post-Covid world.”
If you have any concerns regarding the pressures of Covid-19 on your business, then please get in touch.
