SMEs have been hit hard during the recent pandemic. The media reading is depressing for many business owners at a time when we need to be positive. The statistics are horrendous – it is expected that 2020 will see the largest annual drop in GDP since 1921.
People claiming unemployment benefit rose 69% from March to April – the record low in unemployment at the start of the year has shifted significantly and the number of job vacancies is decreasing. But could this help SMEs in time? Will there be more available talented individuals hungry for work?
We will hear about being in a recession. What is interesting though is that our current downturn is planned in that the government have had to take action to protect our health, which is significantly different to other recessions and once restrictions are lifted, many businesses will be able to trade successfully again. I feel saddened for those that won’t.
I hope that lessons will be learnt from this. Will there be a shift in the 'want' and 'get' mentality? Will we have “rainy day” savings as opposed to a shiny new car? Will there be more strategies to build reserves in businesses? Cash is absolutely king at the moment. Whilst in the form of debt, there is the option of taking advantage of loans (bounce back or CBILs) and there has been the option to defer VAT. This may just be a saving grace for those working capital pinch points. If any loans / deferrals are not needed, they can always be repaid.
What I love about working with SMEs and entrepreneurial business owners is the way that they adapt to different scenarios and fight. It is time to remain positive and to try and switch off from the media. SMEs will grow again and may even come back stronger than ever.