Yahoo Finance Small businesses pushed to the brink by lockdown: 'We swing from total optimism to total despair'
Small businesses across the UK are preparing to reopen their doors on July 4 in the biggest return to freedoms since March 23. However, new social distancing rules will make it impossible for 400,000 firms to reopen, threatening not only their survival, but also Britain's wider economic recovery.
We asked how the owners of the UK's independent shops, firms and start-ups were feeling ahead of July 4. They've shared stories of their preparations ahead of 'Super Saturday', including completely adapting their businesses in line with government guidance. They highlighted the support they'd received from the government in the form of grants and bounce back loans. However, they also stressed that the government could be doing more to support the legions of small businesses who risk going under.
Is your small business reopening on July 4 or will you remain closed? Share your experience in the comments section at the bottom of this article.
Amanda Clegg, massage and aromatherapy clinic owner
I have been running my massage and aromatherapy clinic from home and as a mobile therapist since 2001. My business is closed with no client appointments. I have made a very small number of retail sales from my small client base, but not enough to make any sort of living.
I have clients that I visit who cannot come to me as they are elderly or disabled. They will suffer (are suffering) hugely through missing out on their regular massage.
These are people that I can’t really help using Zoom consultations to work out stretches and self-help, as I can with my younger client base. Sadly, the very small number of online consultations will not earn me a living.
I am desperately wading through the guidelines from the Government on PPE, trying to work out what I will be able to do when I am allowed to reopen. It is looking more and more likely there will be a huge increase in operating costs, which I will not be able to pass on to clients.
I love my work, and I don’t want to lose it. I have invested a lot – both time and money – in training and ongoing CPD. It’s hugely rewarding on a job satisfaction level.
I am 60 and so the prospect of funding any retraining and then having enough working time left to recoup the cost is a bit daunting.
Rachel Broadbent, independent coffee shop owner
We are an independent coffee shop in Abingdon on Thames. We have managed to furlough all of our staff and have been lucky enough to be eligible for the Government grant scheme and Bounce Back loans. We have been able to reduce overheads considerably, but still have payments that have to be met every month. If we had been unable to reopen on 4 July, we would be really starting to struggle.
We have completely redesigned the layout of our shop, including the barista serving area and customer seating to make sure we have sufficient social distancing between all our staff members and the general public. We have spent a great deal of money on PPE and have deep cleaned the shop, including a professional disinfection service. We have done a risk assessment and will be getting all our staff to sign to ensure everyone is happy with the working practises in place. This has entailed a great deal of thought and expense even before we open.
We have been lucky to receive the support we have, so in this respect, we are happy. But the speed at which we were originally shut down on Mother's Day weekend meant we had a large amount of stock on site for a potentially busy period. More detail on the furlough schemes and available finance options would have been appreciated sooner.
We go through periods of total optimism and total despair. However, the reality is that we will be limited by the number of staff working on-site due to safety regulations. Our business will be very different to the one that we had three to four months ago, and we will have to learn to adapt to what that means.
Rod Came, driving instructor
I have been an Approved Driving Instructor (ADI) since 1981, when I left Sussex Police. I stopped teaching learner car drivers about 14 years ago and now specialise in assessing and training minibus drivers for independent schools.
As I deal solely with independent schools, all of which have been shut down for more than three months, I have carried out no work at all. It is a matter of concern whether my clients will be able to run the pick-up and drop-off home services they previously provided as the social distancing rules would mean that each vehicle would have to carry fewer students.
The DVSA (Driving & Vehicles Standards Agency), which has responsibility for providing theory and practical driving tests for learner car drivers, shut down these operations at the start of the Covid-19 outbreak and still have not resumed even a skeleton service for most learner drivers since then. This has resulted in an estimated backlog of 400,000 tests, each of theory and practical. Driving lessons for anything other than essential clients were also terminated.
The resumption of driving lessons is of course welcome news to all in the industry, their current clients and those who will now want to be starting or resuming lessons. Pre-lockdown, there were about 40,000 ADIs. I expect that many will have left the industry – possibly as many as 25pc, but even a 10pc reduction would only exacerbate the problem of too many clients and too few providers.
There is also the problem for ADIs of keeping themselves and their clients safe from infection. Before each client enters the car, it will have to be sanitised after the previous driver. It is recommended that the windows are kept open, which is impractical when it is raining or the vehicle is being driven at speed. These precautions will result in all ADIs being able to provide fewer lessons per day than they normally would, but with added expense. Many will probably find that it is financially not worthwhile.
Russell Donnelly, event production company owner
We’re an event production company mainly to the corporate sector and all of our jobs have been cancelled for the rest of the year.
We would love to open on July 4, but have no work, so will be closed until what we think will be Feb/ March 2021. That will be 12 months with zero income.
We have fixed overheads, including employees that currently remain on furlough. A recently received Bounce Back loan will not cover salaries after the scheme has ended, so people will lose their jobs and I have no income whatsoever.
It is obvious that the Government's response to the economic consequences of the pandemic has been formulated by politicians without enough consultation with business representations such as the IoD or Federation of Small Businesses. The individuals and businesses that benefit from the state support will hopefully survive, but the approach is too scattergun, leaving out too many people, [including] business owners who pay themselves through dividends.
The employees of these businesses, of which there must be hundreds of thousands, are enjoying the benefit of the furlough scheme, but the owners are only able to claim what small amount that is paid through PAYE, if anything.
I would like the Government to extend the self-employment scheme to these business owners so they are able to ride out the crisis. This in turn will help to maintain the staff in employment when the furlough scheme tapers, supporting both employment and the economy.
