Many businesses are struggling (stock image)
Three-quarters of those polled are unsure how they will continue to keep their business afloat in the coming weeks and months. A lack of customers, cash flow issues, and a constant worry that consumer confidence won’t return quickly enough are the main fears held. Worryingly, 46 percent of respondents admitted they have already considered permanently closing their doors because of the pandemic’s impact.
Michelle Owens, the founder of Small Business Britain who has joined with Smart Energy GB to provide a series of money saying tips, said: “COVID-19 has been hugely challenging for microbusinesses across Great Britain.
“As lockdown eases and firms get back to business, many are weighing up their financial situation and focusing on how to recover and move on.
“Now is therefore a good time to evaluate your business expenditure and identify new ways to save money.
“Everything from negotiating deals with suppliers, through to reviewing business models and shopping around for deals, should be on the table.
“Embracing new technologies such as smart meters, which help you identify ways to reduce your energy consumption and therefore save money, is another particularly valuable thing to do at this time.”
The research also revealed more than a third of owners have not paid themselves at all in a bid to cut costs over the last few months – with a further 28 percent claiming they’ve reduced their pay.
One in five have also kept the lights off where possible, and one in six have ensured unused tech is turned off at the socket.
Understandably, decision makers have been keeping a closer eye on their expenditure, with a third now checking their finances daily – compared to just one in five before the pandemic.
But how much they spend on energy is the second most common cost that microbusiness owners estimate behind tax.
Although 56 percent agreed having a better understanding of their energy use would give them greater control over their business expenditure.
It also emerged four in 10 microbusiness owners accessed a Government grant in this period, with more than a quarter using the furlough scheme, and one in five applying for a Government loan.
However, 31 percent had to dip into their personal savings to help keep their business afloat, with nearly a quarter using money from their own current account.
And one in six have borrowed money from family or friends.
The study, carried out via OnePoll, also showed more than a quarter have implemented social distancing measures in order to stay open – with one in five increasing online trade, and a similar number working on an appointment-only basis.
Josh Kay, the co-founder and director of The Syrup Room, a design microbusiness based in Bournemouth, said: “COVID-19 meant that most of our upcoming contracts were cancelled or postponed, leaving us all stunned.
“To help keep our business afloat, we accessed the Government help given to us. It wasn’t a lot, but it was a welcome initial relief.
We also decided early on to take a line-by-line approach to managing our cash flow, getting a better understanding of how much we were spending across the business.
“This is why we recently got a smart meter installed. It will help reduce our energy waste and know exactly what we are using, allowing us to improve our energy use and having the added bonus of reducing our bills.”
To find out if your microbusiness is eligible for a smart meter, contact your energy supplier.
Money saving tips for microbusinesses
1. Forecast cash flow. To save money, you first need to know where it’s going and when it’s coming in. Sitting down with a simple spreadsheet to plot different financial scenarios can be just as effective as sophisticated cash flow software.
2. Access financial support. If you do have a shortfall to meet, consider applying for a Bounce Back Loans and Business Interruption Loans. The Government’s new Job Retention Bonus might also help make it more affordable to retain staff. Just remember that any extra debt you take on will need to be paid back.
3. Cut costs. Reshaping a business can mean extra costs, so interrogate all your spending to see if there are new ways to save – even if it’s how much you spend on milk.
4. Shop around. If you have costs coming up for renewal, take the time to search for deals. You may find discounts through business price comparison sites, business partners, member bodies, or referral schemes.
5. Save energy, save money. Energy usage is one of the expenses microbusinesses are most likely to estimate. Rather than estimate, you can identify ways to reduce your consumption and therefore save money by getting a smart meter installed. Contact your energy supplier to find out if your microbusiness is eligible for an installation.
6. Negotiate openly. If you are really struggling, don’t suffer in silence. Speak to your accountant, or HMRC, about taking up the current offers to defer tax payments like VAT to aid cashflow.
7. Embrace digital. As well as making your business more efficient, tech can help you to do some things yourself rather than outsourcing them. Use basic free options of websites like Canva to create graphic designs or try out Facebook’s new Shops feature. Check out what support you can access via any existing digital partners such as Google’s SME ad credits or the American Express Shop Small offer.
8. Find support groups. The pandemic has been overwhelming for many businesses, so it’s important to make sure you have the right support. Many business schools offer free support through their networks, particularly those belonging to the Small Business Charter.