Findings of The Longitudinal Small Business Survey (LSBS) 2020 on the performance of Small and Medium-sized Businesses with Employees.
The Government Department for Business, Energy and Industrial Strategy has announced the results of their survey of SMEs employing up to 249 members of staff. The survey was conducted between September 2020 and April 2021 and the impact of pandemic is clear to see, with 31% of businesses closing completely and 47% reducing their operations during lockdown.
We were expecting to see employers reporting lower staff numbers but were surprised that just 33% of employers reported lower levels of employment than a year ago. This does not, in itself, suggest that all is well for SMEs as, for the first time since 2010 this figure was higher than the proportion that reported an increase in the number employed (27%). Also, 56% of SME employers reported a fall in annual turnover in the last 12 months and just 67% generated a surplus which is the lowest figure ever reported in this survey.
Having said that, it is perhaps due to the entrepreneurial flair of much of the SME sector, that 77% of employers said they are expecting to increase sales over the next three years.
Top of the list of obstacles to growth for SMEs in 2020 was the pandemic but taxation, staff recruitment and late payment were also cited. The cashflow issue is an important one and something that all businesses should be paying particular attention to as we recover from the pandemic. It is a fact that ignoring short term cashflow issues negatively impacts on a successful turnaround of a business and so we would urge any business to seek advice at the earliest sign of cashflow, or indeed any other issues, as prompt action will provide the best chance for a successful outcome.