Business Economy

COVID-19 and UK Small Business

woman entrepreneur shop owner small businessThe coronavirus has been plaguing not only people throughout the world but also affecting businesses both large and small, from fleet library to independent pubs. We did a study that discovered some interesting information that was both compelling and difficult to process. We discovered that, in the UK, the severity of the coronavirus, depended upon what location people were living in, regardless of the type of business they were in.

How many small businesses have been affected in the North East and in Scotland?

Nearly £12,000 represents the lost earnings for small businesses according to our survey for those that are in the North West and in Scotland which were substantially affected when compared to other areas outside of the capital.

Lost earnings, loan repayments and work has been affected dramatically, affecting Scotland by £15,483.65 in losses and £15,039.52 in the North East.

Loss of income by region

London – £17,074.36
Scotland – £15,483.65
North East England – £15,039.52
South East England – £12,753.44
Wales – £11,804.82
North West England – £11,494.86
The Midlands – £11,079.12
South West England – £10,989.60
The fewest business closures have been seen in the West.
On the other hand, it is there that the pandemic has had the least effect.

Loss of income in these areas is nearly £800, yet it is here that there are fewer business closures, totalling 2% in the West, compared to the 4% for the national average, related to businesses permanently shutting down.

The South East is somewhat similar with only about 3% of these businesses closing because of the pandemic.

Region % of businesses permanently closed

London – 7%
North West – 6%
Scotland – 5%
Midlands – 4%
North East – 4%
Wales – 4%
South East – 3%
South West – 2%
In the South West, which was not surprising at all, they are also very confident about getting businesses back to normal. Nearly 80% of businesses that are located in this region, as well as in the South East, want things to go back to normal quickly.

How many businesses plan to continue as normal?

South West – 79%
South East – 78%
Wales – 74%
London – 70%
North West – 76%
North East – 75%
Midlands – 74%
Scotland – 76%

Small business growth will always be affected greatly by what happens in London

It is in the capital that business activity, especially for small businesses, has been a hub which is why the turbulence caused by this pandemic has been so significant.

They have the highest average loss of income in the entire UK, and London small businesses are the most likely of all of them to shut down permanently, starting at about 7%.

Temporary closures, however, are the lowest in London at 61% compared to 67% which is the national average.

London is a focal point to how those in the UK will deal with the pandemic, representing 15% of the small business owners that actually want to begin a new business once the pandemic has ended.

The resilience of small businesses

A comment by Alan Thomas, our UK CEO, states: “The coronavirus has affected nearly every part of the UK, and this financial impact is quite significant. SMEs that are located in London will literally eat the cost of £17,000 per each business, and that is much higher than the £5,000 national average.

COVID-19 has impacted small businesses in a large manner, which is why the resiliency of small business owners, and those that want to start new ones, is so encouraging, especially in light of how this pandemic seems to keep perpetuating.

“There are so many of them that want to restart their business, and just continue as normal, with even more wanting to start new businesses, that we think that we will do very well as we go through the many stages of this lockdown.”