More than half of owner-managed businesses say uncertain trading conditions pose the biggest single challenge coming out of the third lockdown – with 15% still in survival mode.
Recent research by the Association of Practising Accountants (APA) found that many businesses are still struggling with the impact of Covid-19 and the uncertain economic outlook, coupled with the challenges posed by Brexit.
A worrying 11% of the 435 businesses across the UK, surveyed between April and May, reported that it is likely they will have to make redundancies in the next three to six months.
Meanwhile, 24% reported a negative or very negative impact on their business since the UK left the EU and 15% cited Brexit supply chain issues as their biggest challenge.
It is however pleasing to see that 84% of businesses are either confident or somewhat confident they would be able to access the finance they need over the next six months, with anecdotal evidence suggesting the major banks were continuing to lend.
Commenting on the findings, Paul Dickson, CEO and Managing Partner of APA Member firm Armstrong Watson, said: “This research shows that 15% of owner-managed businesses who have managed to pull through the pandemic are still in survival mode. There is, however, evidence to suggest that those businesses are now more resilient.
“As the country continues on the roadmap out of lockdown, it is still a testing time for some business owners throughout our regions and across a variety of sectors. Added to this is the impact of Brexit which is highlighted in these results, with almost a quarter suffering as a result.
“Over the coming months, it is vital that Government maintains a flexible and targeted approach to business support focusing resource on those sectors where there is the greatest need. Owner-managed businesses form the backbone of the UK economy and need continued targeted support.
“Our message to clients is to look beyond what’s happening now, carefully assess your business position over the coming months. Coming to terms with a potential new reality will be difficult but preparing for it is essential, whether that means utilising alternative funding, considering restructuring or optimising tax liabilities, these are just some of the many options businesses could take to aid survival.”