Worried microbusiness owners in retail estimate that, despite lockdown now being eased, they have an average of just nine weeks left before they will be forced to stop trading.
New research by Smart Energy GB, which surveyed the owners of 124 retail microbusinesses (firms with less than 10 employees) reveals the devastating financial effects of the pandemic, with three quarters of those polled anxious about how they will keep their business afloat in the coming weeks and months. The biggest concerns for struggling owners are a lack of business, consumer confidence not returning quickly enough and cashflow issues.
While many microbusinesses have now started trading again, more than half (58%) of respondents admitted they had already considered permanently closing their doors because of the pandemic’s impact. To help support microbusinesses during this difficult time, Michelle Ovens MBE, Founder of Small Business Britain, has created some money saving tips which may help towards a healthier bottom line.
Commenting on the current situation, she said: “COVID-19 has been hugely challenging for microbusinesses across Great Britain. As lockdown eases and firms get back to business, many are weighing up their financial situation and focusing on how to recover and move on. Now is therefore a good time to evaluate your business expenditure and identify new ways to save money.
“Everything from negotiating deals with suppliers, through to reviewing business models and shopping around for deals should be on the table. Embracing new technologies such as smart meters, which help you to identify ways to reduce your energy consumption and therefore save money, is another particularly valuable thing to do at this time.”
Understandably, retailers have been keeping an even closer eye on their cash flow, with many taking drastic measures such as not paying themselves (28%), dipping into their personal savings (26%) and taken a personal council tax holiday (14%) to stay afloat. Two in five now also check their finances daily – compared to 21% before the pandemic.
Yet despite this laser-like focus, many admitted that they still estimate their energy costs, despite almost half of retailers (48%) agreeing that having a better understanding of their energy use would give them greater control over their business expenditure. In fact, energy is the second highest cost that microbusiness owners estimate, only behind goods.
Robert Cheesewright, director of corporate affairs at Smart Energy GB, said: “There’s no doubt it’s been an incredibly difficult time for businesses, and particularly for those at the smaller end of the scale. Even though microbusiness owners have taken a forensic approach to their expenditure, and continue to make some difficult cost-cutting measures, energy is still viewed as a cost that can only be estimated.
“One easy step that will give microbusiness owners control back over their energy costs is contacting their energy supplier to see if they are eligible for a smart meter. This will help them keep better track of their energy and give them the information they need to reduce their consumption – in fact, 37% of the retailers surveyed which have had one installed say it has given them a greater understanding of their energy use.”