At least 250,000 UK small businesses set to fold without further help, a new study warns.
The quarterly Federation of Small Businesses (FSB) Small Business Index (SBI) shows UK business confidence is at second lowest ebb in the report’s ten-year history.
- One in five firms reduced headcounts in three months to December; one in seven expect to do so this quarter.
- Share expecting profits to fall over next three months hits all-time high, with exporters feeling the strain as new EU-UK trade deal beds in.
- A record number of small business owners are planning to close their firms over the coming twelve months, putting the UK on course to lose more than a quarter of a million businesses, according to the latest SBI.
The FSB surveyed 1,400 firms and just under 5% said they expect to close this year. The figure does not reflect the threat of closure faced by those hoping to survive despite having frozen their operations, reduced headcounts or taken on significant debt.
There are 5.9 million small firms across the UK, according to the Department for Business, Energy and Industrial Strategy (BEIS). The UK SBI confidence measure stands at -49.3, down 27 points year-on-year. The reading is the second-lowest in SBI history, second only to that recorded in March 2020. The vast majority of those surveyed (80%) do not expect their performance to improve over the next three months.
Close to a quarter (23%) of small firms have decreased the number of people they employ over the last quarter, up from 13% at the beginning of last year. One in seven (14%) say they’ll be forced to cut numbers over the next three months. BEIS estimates that 16.8 million people work in smaller firms across the UK.
For the office imaging sector, predominately small businesses themselves, the situation appears to be stronger. A year end telephone survey of a cross section of office imaging providers, undertaken on behalf of The Recycler, paints a better picture. While overall print volumes are down, there is strong demand for reused printers and consumables especially in the inkjet market.
UK sales of new build laser products were down 13.8% compared to 2019. Sales of new build laser products across Europe in 2020 were down 18.8% in 2020, compared to 2019.
David Connett, Partner at Connett & Unland GbR said: “The challenge for the UK imaging sector is that small businesses are a strong segment of the overall imaging business and all business closures have an impact on the market.”
FSB National Chairman Mike Cherry said: “The development of business support measures has not kept pace with intensifying restrictions. As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods. A record number say they plan to close over the next 12 months, and they were saying that even before news of the latest lockdown came through.”
