A third of Scottish business owners who shut down operations during the coronavirus outbreak fear their firm may never re-open, according to a major new survey from the Federation of Small Businesses (FSB).
On the back of the research, the small business campaign group is calling for sustained government support for firms grappling with the impact of the crisis. Further, the FSB in Scotland wants clear official guidance about the steps businesses north of the border should take before they consider re-opening.
FSB’s survey of 5,471 UK small business owners, with 758 from Scotland, found that about half of Scottish firms (53%) have been forced to close since the beginning of the coronavirus outbreak, compared to four in ten (41%) across the UK.
Of those that have closed – both in Scotland and across the UK – about a third (35%) are not sure whether they will ever reopen again.
Andrew McRae, FSB’s Scotland policy chair, said: “In the jaws of the crisis, a huge share of independent Scottish firms did the right thing, followed the official advice and shut their doors. Our new survey shows that many of these operators worry they’re closed for good.
“We’re certain however that with the right help from government, bigger businesses and the general public, we can ensure these fears aren’t realised. But this research does show that many local operators are on a knife-edge.”
According to the survey, about a fifth (19%) of Scottish businesses have failed to make, or faced severe difficulties in making, commercial rent or mortgage repayments as a result of the pandemic’s economic impacts.
Further, seven in ten (71%) Scottish small employers have furloughed staff to aid the survival of their business. Around three quarters (70%) of these businesses say the ability to partially furlough workers would benefit them – half (46%) want to bring staff back gradually, and over a quarter (28%) say it would keep their business viable.
Andrew McRae said: “When the time comes to begin to re-open, businesses won’t be able to go from nought to sixty overnight. For many employers, they’ll want to phase a return to test any new systems and to keep their staff safe. Allowing the partial furloughing of workers is a vital policy move that would allow many smaller firms to restart smoothly and sustainably.”
Later today, FSB is hosting the first of a series of free-to-attend webinars for Scottish small business owners. The session will see representatives from Scottish Enterprise and local government give guidance and information on the government support on offer for Scottish businesses.
Andrew McRae said: “Recognising the importance of smaller businesses to local economies, governments north and south have launched various support schemes. We’re playing our part by helping to inform Scottish local firms about the help on offer, while making the case to policymakers about ways to close any gaps.
“When the focus shifts from shutting down, to reopening safely – Scottish businesses will want clear no-nonsense guidance from the powers that be. We’ll need to see sustained help on offer to help firms avoid stalling on re-start.”