The impact of Lockdown 2
When Chancellor Rishi Sunak presented the UK’s Spending Review, he described the situation we face as an “economic emergency.”
Though Lockdown 2 has been less draconian than its predecessor, it will still reduce collective wealth. It will also result in a severe loss of revenue for sectors such as hospitality and retail.
It’s not just smaller companies facing these troubles, either. The news that the once dominant Arcadia Group is teetering on the brink of administration will have sent shockwaves as to the immense difficulties all retailers are facing.
Tough decisions will lie ahead. It’s imperative that independent businesses, whether they be based in Birmingham or further afield, get the support that they need.
BCU Advantage is here to support those based in the West Midlands, and their COVID-19 support measures are regularly updated.
There are also a number of business loans and grants available. These include bounce back loans and the coronavirus small business interruption loan scheme.
How hard will the UK economy be hit?
Businesses that depend on the usual Christmas footfall will severely lose trade.
This isn’t going to be our usual Christmas, where we see high streets filled with people doing their festive shopping and enjoying nights out.
Some families may want to forget the woes of the year and treat themselves, spending more money than normal. However, many families would have seen their reserves and savings reduced.
For the UK economy as a whole, we could all face difficulties from reduced economic activity. It will mean lower tax revenues which, in turn, means less money that will be critical to recovery and rebuilding.
There is a fear that 2021 may result in long-term damage and economic scarring.
As Sunak stated in his Spending Review, the “storm” that is Covid-19 has brought damage to the UK economy that will take years to repair.
The worry is our high streets may look even more barren than they already were.
How can independent businesses survive?
A few months ago, I wrote a piece for BCU Advantage discussing how businesses can attain funding support during these difficult times.
- The Greater Birmingham and Solihull Local Enterprise Partnership are continuing to offer support through their Your Step Forward scheme;
- The UK Government continue to update their pages with small business support. The Federation of Small Businesses has also posted a range of valuable funding sources;
- The Greater Birmingham Chamber of Commerce offer a number of support measures for local businesses;
- BCU Advantage themselves provide tailored business analysis that could help you identify your areas for improvement.
In any crisis, the key objective is short-term survival. This requires using resources sensibly and operating in as lean a way as possible.
As we move to a world in which online trading becomes the norm, maintaining expensive high street shops and warehouse facilities may become outdated and unnecessary.
Online retailing demonstrates that if the customer gets what they want and there is no diminution in quality or reliability, they are not bothered about how it got there in the first place.
The key to success, therefore, is for every independent business to know exactly who its customers are or, of course, potentially may be in the future.
Steven is an Associate Professor at BCU’s Institute of Design and Economic Acceleration (IDEA), which works with start-ups and SMEs to help them progress to next stage business development.
Looking for support during these difficult times? BCU Advantage offers a number of tools and services that can assist you...