15% of owner managed businesses still in survival mode with 1.85 million employees at risk of redundancy

Owner-managed businesses coming out of the third lockdown are still struggling with the impact of Covid-19 and an uncertain economic outlook, reports our survey.

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The survey of 435 businesses conducted by Kreston Reeves and the Association of Practicing Accountants found:

• 11% reported that it is likely they will have to make redundancies in the next 3-6 months, putting a potential 1.85 million jobs at risk across the UK.
• 24% reported a negative or very negative impact on their business since the UK left the EU.
• 53% of respondents identified uncertain trading conditions as their biggest single challenge.
• 15% cited Brexit supply chain issues as their single biggest challenge.

Nonetheless:

• 84% of respondents reported that they were either confident or somewhat confident that they would be able to access the finance that they needed over the next six months, with anecdotal evidence suggesting that the major banks were continuing to lend.
• Longer term, 54% were more positive about their economic prospects outside the EU while 46% were less positive.

Commenting on the findings Andrew Tate, Partner and Head of Restructuring at Kreston Reeves said: “It is clear from our research that a significant minority of owner managed businesses who have managed to pull through the last 12 months are still in survival mode with uncertain trading conditions being the biggest concern to a majority.

“Nonetheless, there is also evidence to suggest that those businesses that have managed to weather the impact of Covid-19 are now more resilient and that existing and proposed Government support measures have generally been well received.

Nigel Fright, Managing Partner adds: “Over the coming months it is vital that Government maintains a flexible and targeted approach to business support focusing resource on those sectors where there is the greatest need. Owner managed businesses form the backbone of the UK economy and need continued, targeted support as we emerge from this third lockdown.”

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