Over the past 18 months, SMEs have been confronted with the serious financial implications of nationwide lockdowns and operational restrictions. With six million SMEs in the UK, accounting for 99% of all businesses and over 60% of all employment they represent a significant sector of the economy. The total cost of Covid-19 for small businesses is higher than anticipated – upwards of £126.6 billion.
Many SMEs are vulnerable to such an economic shock. They frequently do not have the reserves to survive such a protracted period of lockdown. Over 1,400 went bust in September 2021, the highest number since March 2020. The Insolvency Service said the increase in September meant the number of insolvencies was up 56% compared with September 2020’s figure of 928. The end of government support is being blamed for this.
Most government measures that protected firms from creditors were lifted in September, fuelling concerns that many companies that were forced to borrow heavily to survive during the pandemic will collapse next year.
While there were some grants available to support small businesses during the pandemic, they weren’t enough to make up for the lost revenue. 81% of small businesses said they haven’t had enough support from the government. Many do not have enough reserves and have run up significant debts to cope with the crisis.
A recent Bank of England report found that a third of UK’s small businesses were classified as highly indebted with debt levels of more than 10 times their cash balances, compared with 14% before the pandemic.
How we fared
Like other small businesses we have had a tough 18 months. The cessation of live events meant the demand for exhibition stands ground to a halt. Luckily we had the reserves to see us through. The nature of our business means payment is always taken up front and therefore we had no credit accounts or debtors. We did have to make a number of staff redundant unfortunately, but the only way for the business to survive was to cut back to a skeleton staff. We were also forced to switch off the office heating and sell vans. Even with the cutbacks we burned through most of our reserves.
But we rode out the storm and were very relieved when things started to open up again. Live events began again in the summer of 2021 and with that came demand once again for exhibition stands. Luckily we still had equipment, materials and stock and could bring staff back from furlough.
Back on track
Things gradually picked up over the summer with a few events here and there. But, during the autumn live events came back with a bang and we have been incredibly busy. In October, we built 15 stands across the country at 9 exhibitions in 2 days! Over the whole month we designed and built over 50 stands.
All this extra demand has meant that we have had to hire a lot of new staff to fulfil the orders. This has been a challenge in itself, one of the side effects of Brexit has been a shortage of manual workers. So recruiting the staff we need has been difficult.
Then of course the new staff have to settle in and learn the ropes. This has meant lots of training to try and get them up to speed quickly. All this had to happen alongside fulfilling the new orders that have come in.
MD Alan Jenkins said “It’s been a tough year, luckily we had reserves, built up over decades, to see us through. Things are looking brighter now though, exhibitions are running again so with that has come demand for stands. We are looking forward to the New Year when, hopefully, events will continue to go ahead as planned. Obviously the new strain is a bit of a worry but hopefully it won’t lead to further lockdowns, or many more businesses will go bust”.
So hopefully 2022 will be a better year for everyone, for although the pandemic isn’t over, vaccines should protect the majority of the population. This should enable things to run normally again. The events and hospitality industries will be very relieved if this is the case, many would not survive another lockdown.
For help with your next exhibition stand, call us on 01202 723 500, or email email@example.com.