Small businesses across the UK are expecting a difficult summer as they predict redundancies are likely to spike in August even as lockdown starts to ease.
The total impact on revenue that SMEs expect from the coronavirus outbreak has reduced from minus 29 per cent at the start of lockdown to minus 10 per cent in May.
However, a poll of over 5,000 SMEs commissioned by technology firm Sage shows that 60 per cent of firms are considering redundancies. The government’s job retention scheme has been heralded as crucial to supporting small firms through the pandemic but employers will soon be asked to contribute towards costs, which will likely lead to job cuts.
Although lockdown restrictions are starting to ease, the Sage report underlines the scale of the challenge that lies ahead. The poll shows that 61 per cent of firms are operating at a loss, and 68 per cent are experiencing a more than 25 per cent reduction in sales.
The divide between sectors has widened somewhat, and for the hospitality and retail industries there has been little change in outlook since the start of lockdown. Even by late May, the hospitality sector maintained expectations of a minus 75 per cent hit to revenue.
Unsurprisingly the extent of the issues means support and approval of government action has grown from 47 per cent at the start of lockdown to highs of 63 per cent in early May. This corresponded with the introduction of bounce back loans, which offer 100 per cent government-backed loans of up to £50,000 to small businesses.
Lockdown is ‘hunting ground’ for cyber criminals
While SMEs grapple with the “new normal” and a hit to revenues, they will also need to look carefully at their digital safety.
As physical workplaces shut, 28 per cent of firms have pivoted to online but it has meant that nearly a third of SMEs have been victims of hacks, cyber scams or malware since the start of the outbreak.
Despite this, digital security is the lowest priority for investment, and only six per cent of those polled see it as a significant priority.
Ben Aung, global chief information security officer at Sage said the pandemic is “fertile hunting ground for cyber-criminals” as firms pivot to remote working.
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He said SMEs should ensure encryption is active and employees receive training to ensure firms are protected against potential attacks.
“We may be in this situation, or a version of it, for some time to come. Businesses must understand how attackers are exploiting that fact, and ensure their employees have the knowledge, capabilities and support to play their part in reducing business and cyber risks,” he added.