Small businesses report confidence, despite concerns, as COVID restrictions lift

Debt, rising costs, skills shortages and international trade disruption were among the biggest concerns of the 1,500 small businesses who responded to FSB’s latest survey.

Half of small business owners maintained a positive outlook on the future of their business with restrictions lifting – 50 per cent of respondents predicted that their business performance would improve in the next three months.

One in three (32 per cent) expect their prospects to worsen.

Yet slightly over half (54 per cent) of small firms reported they hoped to expand their businesses – the highest proportion to anticipate growth since Q1 2017. 

Moreover, one in five (21 per cent) stated they intended to hire new staff within the next three months.

Staffing issues, however, appeared to be front of mind, with 37 per cent of business owners citing a lack of appropriately skilled staff as a barrier to growth. This is up 18 percentage points compared with Q2 in 2019. 

The rising price of business-critical insurance was another area of concern, with many reporting difficulty in accessing the policies they need to operate. A quarter or respondents cited input costs as a current impediment to growth.

The fallout of Brexit, too, had small businesses worried. Almost all importers and exporters (92 per cent) reported shipping delays since April 2020, and close to a quarter of exporters ceased selling to the EU on either a temporary or permanent basis.

FSB national chairman Mike Cherry highlighted the challenge facing small businesses adapting to new trade regulations.

“Without the big legal, logistics and HR departments at the disposal of large corporates, a sizeable number of small exporters have thrown in the towel, stopping sales to the EU altogether,” Mr Cherry said.

Consequently, Mr Cherry urged the government to reopen the SME Brexit Support Fund, which was accepting applications from 15 March through 7 July. 

He also stressed the need for co-operation from shoppers and assistance from the government as small businesses adjusted to reopening their doors with pandemic restrictions lifting. 

“We’re urging all shoppers to respect the house rules at each business they visit from today, as owners strive to keep customers and staff safe,” Mr Cherry said.

“The government and police should be getting the message across that firms will be supported if customers refuse to abide by their terms of doing business.”