UK small businesses appear to be facing greater challenges from Covid-19 than their larger counterparts according to customer data revealed today by Gazprom Energy.
Compared to larger enterprises, more small businesses are feeling severe effects of Covid-19 with 62% of SMEs reporting a decrease in sales & revenue compared to just 32% of large enterprises. With cashflow limited, SMEs also have less opportunity to make changes and adapt to the global pandemic, meaning they’re at a disadvantage compared to their larger business counterparts.
The business energy provider spoke to over 325 SME, mid-sized and large corporate enterprise customers in September about their business plans over the next six to 12 months in light of continued Covid-19 challenges.
Brexit has paled into insignificance as a challenge compared to Covid-19 for most of those surveyed by Gazprom Energy. SMEs are more likely to see Covid-19 as their main hurdle at 80%, compared to 74% of large enterprises. Across all of those surveyed, just 14% were more worried about the implications of Britain leaving the EU; 7% were unsure.
“Small businesses can be inherently resilient, but Covid-19 has hit them particularly hard. Compared to larger enterprises with deeper pockets and more opportunities to reduce costs and recoup lost revenue, some small businesses may well struggle to bounce back,” said Grace Rothery, Head of UK Retail at Gazprom Energy. “What SMEs need right now is as much certainty as they can find – in terms of business costs, contracts, and sales. Although energy and utilities are often not a priority focus for SMEs, having clarity around many operational factors like these, and seeking to reduce fixed costs as much as possible, is critical for longer term security.”
Despite current rises in unemployment, in the longer term, recruitment plans appear to outstrip potential redundancies. 28% of businesses hope to create jobs, compared to just 20% who feel lay-offs are likely. While SMEs are in the same boat when it comes to recruitment plans outweighing redundancies, they’re still less likely to be recruiting, with only 21% planning to do so, compared to 50% of large enterprises
Many employees have welcomed the break from the daily commute and many large businesses (48%) have plans to update their policies around flexible home working. It is more difficult for SMEs to do the same with smaller workforces and less flexibility, and that’s reflected in survey results. Only 27% of SMEs plan to change their policies to allow more staff to work from home over the next six months.
Investment in staff wellbeing could be a positive long-term change triggered by Covid-19, but again, this poses a greater challenge for SMEs that may not have the same access to resources as larger businesses. With deeper pockets, large corporates are more likely to have existing wellness strategies in place, as well as teams to deliver those strategies, whereas these activities often fall solely to business owners of SMEs. As business owners juggle the everyday tasks of running the business, only 38% of SMEs believe that they will be focusing time on reviewing wellbeing and mental health strategies in the coming months compared to 64% of larger enterprises.
Rothery continued: “At Gazprom Energy we understand that SME’s need extra support through these challenging times. Our customer service team has taken a proactive approach by contacting customers directly by phone throughout the pandemic. We’ve been able to offer guidance, helping SMEs to manage payments and any potential debt issues that may arise. SMEs are a huge part of our economy and it’s important that we offer sufficient support to allow them to thrive for years to come.”
The research was conducted by Mustard Research on behalf of Gazprom Energy in September 2020. 326 businesses were spoken to from Gazprom Energy’s customer base, comprising 54% SME and 46% mid-large enterprises.
For more information, please visit www.gazprom-energy.co.uk.