There’s no doubting that the last 12 months have been difficult for consumers, but it’s been a particularly rocky road for owners of small businesses, many who’ve found it difficult to keep afloat.
Independent shops, cafes, restaurants, and manufacturers have all had to learn to adapt and try to survive for the last year as covid lockdowns took their toll.
An estimated 6m small businesses in the UK which employ more than 16 million workers are in a financially precarious position because of the pandemic.
Nearly two-thirds of entrepreneurs felt their business might not survive the pressures of Covid-19, while more than half predicted they would run out of money within the next 12 months.
With lock down now starting to ease, SME owners can breathe a sigh of relief and start making plans again to bring in some much-needed money through the tills.
That means taking on new staff, winning new contracts and getting back to what they know best – serving their customers.
But many are teetering on the brink and starting almost from scratch, their once thriving business now a shadow of what it was prior to March 2020.
The mental stress and anguish and many sleepless nights have been a major issue for owners who have seen their financial situation worsen month by month.
As a result, some small companies may be looking to cut their overheads to survive but it could prove costly if business back up services such as insurance are cancelled.
It’s important to ensure that the right amount of cover is in place if you need it, by all means get new quotes to try and lower your premiums but cancelling cover completely can be a false economy and could come back to haunt you further down the line.
There are no doubt areas where businesses may be able to save money, without putting their livelihood in jeopardy – looking to cut energy costs is definitely an area worth exploring and could help lower the monthly operating costs at a time where every penny counts.
Another avenue worth exploring is rent costs – talking to your landlord and explaining your financial plight may result in lower monthly terms being agreed – after all many landlords are also suffering financially and so may be prepared to be flexible if it means keeping a tenant for the foreseeable future.
Rebuilding a business is not a five-minute task and it may take many years of hard work to get back on track, but it’s important to look at the long-term picture and not go on a cost cutting spree without taking time to evaluate the potential consequences of such a move.