It is hardly news that small businesses up and down the UK have been facing pressures that are, in many cases, probably unlike any they have previously experienced.
Greater insight was provided into some of those pressures by the findings of new research ahead of the Autumn Statement by an accounting software company, which discovered that nearly a quarter (23%) of SMEs (small and medium-sized enterprises) believed the UK economy had sustained irreversible damage due to COVID-19 and/or Brexit.
Even more starkly concerning than that was the 64% of business owners who said they were worried their firms would not even survive the coming 12 months.
Divides in opinion evident between business owners and accountants
Intriguingly, the research findings show that accountants and business owners do not always have broadly the same view of the UK’s present and future political and economic outlook.
Some 62% of accountants, for example, said they were either about the same or worse off under the government of Rishi Sunak, despite the widespread belief that his rise to the role of Prime Minister would help bring greater stability and certainty.
However, this percentage fell to 45% in the case of SMEs, and it seems the UK’s small businesses have hope that the former Chancellor’s presence in Downing Street will enhance their prospects. 22% of SMEs – about a fifth – said they believed their business had a much-improved chance of surviving now that Mr Sunak is Prime Minister.
How long did respondents expect the economic pain to last?
The survey was first run in mid-October, when Liz Truss was Prime Minister. Back then, a total of 28% of polled accountants and business owners expected economic pressures to ease in three to five years.
However, following the disastrous impacts of previous Chancellor Kwasi Kwarteng’s mini-Budget, the expectation of recovery taking much longer has heightened, with the proportion of those anticipating it will take three to five years for economic pressures to ease rising to 38%.
It seems from the findings that accountants are especially downbeat in their outlook, some 50% of those responding to the latest survey indicating they now think economic pressures will take three to five years to ease. Back when Liz Truss was in office, only 38% of accountants were of that view.
Again, though, there are signs that small business owners might see Mr Sunak’s appointment as Prime Minister as a source of hope, as 28% of them now believe it will take one to two years for economic pressures to reduce. This is compared to 22% during Ms Truss’s truncated time in the top job.
The poll findings did, though, show that accountants and small business owners continue to grapple with largely similar challenges, including inflation, recruiting difficulties, and escalating energy bills, which both groups cited as among their top pressures.
Steps taken by SMEs to help deal with those pressures have included reducing employee benefits – as referenced by 24% of those questioned – as well as halting training programmes, which some 25% of small-business respondents said they had done.
Allow TAG Consultancy to help firm up your business’s resilience in 2023
With a New Year fast approaching, now is the time to ask yourself whether there are further steps you can take to cement your business’s survival prospects and help inspire growth for the 12 months ahead. Here at TAG Consultancy, we have long taken pride in assisting businesses in their efforts to achieve exactly that.
We cater to the needs of individuals and businesses throughout Gibraltar with our leading-edge solutions – so, whether you are seeking out accounting, auditing or payroll solutions, or are instead looking for advice on the blockchain or to launch an AML-compliant token sale, we are available to help. Please don’t hesitate to get in touch now to arrange your free consultation.