Double-digit loses in food and drink SMEs due to Covid-19, insurer Simply Business reveals
A survey by the UK insurance company Simply Business has found that 55% of SMEs in food and drink serving the hospitality sector are at risk of permanently closing
Small businesses in food and drink serving the hospitality sector in the UK are expected to see more than £21,000 million each in lost work, earnings and loan repayments, 55% is at risk of permanently closing, a new report by insurance company SImply Business has revealed.
Simply Business has released the findings of a survey that canvassed 251 small businesses serving the hospitality industry. According to the report, 54% are also very concerned about the future of their business.
The figures come as the hospitality sector began to emerge from the crisis with many opening their doors on 4 July.
In a move to help businesses in the sector, Simply Business has launched a free financial support checker. The online tool aims to help small businesses, landlords and the self-employed to quickly determine what financial support and schemes are available to them during the coronavirus pandemic.
A simple questionnaire takes business owners just a few minutes to complete and will point them towards relevant government financial support.
“No business has been able to escape the impact of the pandemic – and that’s no different for small businesses and the self-employed,” said Alan Thomas, UK chief executive at Simply Business. “They’re the lifeblood of the economy, and with many of these at risk of permanent closure, so much is at stake for our local communities and the wider economy.”
SMEs in food and drink feel the pressure
The Simply Business survey revealed that 55% of small business owners in food and drink think their business is at risk of permanently closing due to the Covid-19 pandemic.
One-tenth (19%) believe they’re likely to close within 3-6 months, well over a tenth (15%) within six months to a year, and another over a tenth (14%) within the next three months.
The study revealed that just over half (52%) of the surveyed businesses are worrying about losing customers and their jobs from the pandemic.
One third (35%) of small business owners operating in food and drink are also concerned about running out of money, with one in three (32%) admitting they have had to borrow money from friends and family to keep afloat.
Moreover, 20% of businesses are concerned about being able to pay back the money borrowed and one in five (18%) SME owners are worried about going completely bankrupt.
Seven out of 10 (71%) SME’s within food and drink were able to apply for government grants, loans and schemes and well over a third (36%) have felt particularly supported.
Only one quarter (24%) reported to feel fully supported and just over the same amount (28%) have felt no support at all.
When looking at improvements, two in five (39%) business owners also felt there could have been greater communication and transparency from the government about the impact on small businesses and the self-employed.
Thomas said that few small businesses have been hit as hard as those in the hospitality industry, and it’s clear that many will take time to recover.
“Small business owners and the self-employed have shown how creative, determined and resilient they are throughout the pandemic, and we know they’re going to be crucial as the UK economy looks to bounce back,” Thomas concluded.