This has been a year unlike any other. With the fallout of COVID-19 continuing to have an impact, there has been a lot of upheaval for many small businesses in the UK. On the other hand, however, more than 95,000 new businesses were created between July and September 2020 – a 7.2% increase on the year before.
So, what’s happened to well established small businesses and what’s led to the arrival of these new businesses during the global pandemic? Here’s a look at the small business trends that were sparked by the coronavirus.
A growth in the need for support
We’d already begun to make the move towards supporting independent businesses in our area before March 2020, but since the pandemic hit and we all went into the first lockdown, that drive to shop local has grown.
According to Google’s Year in Search, ‘support small business’ saw a huge leap in searches around the world. This reveals that customers wanted to support their local businesses as much as possible during the crisis – and this is set to continue this year too.
There are practical types of support that businesses will need too, after recent events, such as insurance and additional funding. Insurance providers such as Gallagher specialise in providing risk protection for SMEs, so it’s worth business researching what support and cover is out there.
The arrival of new SMEs
As autumn 2020 saw the number of job losses reach 700,000, it became clear that those who were out of work or were precariously balancing in the limbo of furlough would need to seek alternative employment. With the job market saturated with hundreds of candidates for the one role, it’s stands to reason that people would opt to set up on their own.
It’s likely that this situation is the reason behind there being more new businesses launched in Q3 last year than in the same period the year before.
However, there are challenges ahead for those who have set up their own business recently. Not all new enterprises are successful. In fact, Forbes estimates that around 45 to 51% of small businesses make it to the five-year mark. Additionally, these new businesses may be competing with established SMEs in the field. 2021, therefore, is likely to see how these new endeavours fare in the current climate.
Remote work is key
Another reason behind the growth in new business launches is potentially to do with everyone working from home at the same time. With everyone working online, it’s likely that many of the new businesses are based on or around digital platforms.
Remote working has also changed the way small businesses that usually operate from an office operate. The need for workers to sit in the same room has been removed after employees were told to stay home to keep everyone safe. Employers had to adapt technologies to make it possible for teams to communicate online, but once these were in place, employees have not only been meeting targets, but often exceeding them.
As a result, SME owners are likely to be planning remote opportunities for 2021 and beyond. Now that businesses have been based from home for almost a year, it’s likely that office life we once knew will be very different post-pandemic.
The ability to adapt
The growing trend in small businesses learning to adapt will continue this year. In 2020, SMEs were forced to make changes in order to survive the financial fallout of losing trade and customers.
Restaurants had to create takeaway services, boutiques and independent shops had to build online stores, and delis had to look at ways to sell their fresh produce. As a result, some businesses found new customers and a different level of success. In fact, a fifth of SMEs said they had something positive to take away from what they experienced last year.
As the year unfolds, we’ll see just how small businesses are handling the new normal.