In the wake of the ongoing backlash, the majority of UK SMEs want Boris Johnson to step aside – with 63% saying they want him forced out of his leadership role. In terms of potential replacements, Rishi Sunak (24%) comes in first, according to the latest Newable Small Business Confidence Index.
The exclusive survey of 1,003 SME decision makers by Atomik on behalf of leading provider of money, advice and workspace to SMEs, Newable, reveals that the rising cost of materials remains the number one challenge for SMEs (41%) followed by cash flow issues (36%) and labour and skills shortages (35%).
Seventy-seven percent are concerned about new variants of Covid-19 and the impact on their business revenue. This is aligned to a drop in confidence with regards to wider UK economic recovery, with just 25% of SMEs believing it will take 18 months or less, down from 51% during H1 last year.
Mirroring this, 58% are currently delaying investment decisions until we are in a more stable situation, while almost half of SMEs have struggled with finances during the pandemic. 47% have acquired new finance over the past 12 months, with 38% of these using a specialist lender, 33% using a high street lender and 32% sourcing a loan from family or friends. 42% expect to borrow more money next year as they get to grips with ongoing challenges. Of those anticipating borrowing, 47% would do it so they can release and stabilise cash flow into the business, 46% to purchase new assets or refinance and 28% to develop or build property.
While the pandemic has brought challenges, it has also shone a positive light on sustainability. Aligned to shifting ESG trends and increased awareness from COP26, 90% of UK SMEs now cite having a sustainable office environment as bring important, up from 83% in June last year.
Forty-four percent said working from home impacted them positively with only 17% only impacted negatively. However, long term the jury is split, with 43% of SMEs expecting their employees to return to office full time and 41% expect hybrid working to remain in place. Aligned to this, flexibility and not wanting to get bogged down with long term commitments are important – on average the ideal office contract length is less than 3 years but more than 1 year (38%). Flexible, short-term contracts (36%) and the ability to easily change the size of your space (33%) are the most sought after characteristics, representing a sea-change from the typical five year fixed contracts that were common pre-pandemic.
Chris Manson, CEO of Newable said, “Despite the ‘back to normal’ narrative from the Government, concerns around weak political leadership threaten to undermine economic recovery, with SMEs still feeling uncertain about the future. Materials, cash flow and stability remain significant challenges. However, the rise of non-high street lenders is providing some much-needed support to keep Britain’s businesses operating.
“Despite the current landscape, history has shown repeatedly that UK businesses are remarkably resilient with many pivoting or adapting their offering.
“For many businesses, hybrid working is here to stay which can be a significant cost-saver as they shun the larger traditional fixed premises in favour of smaller, flexible spaces that give them options. Reflecting an increased focus on ESG at both business and consumer level, the growing desire for sustainable workspaces that play their part in reducing environmental impacts must also be seen as a hugely positive thing to come out of the pandemic.”
The exclusive Newable Small Business Confidence Index reflects the views of 1,003 small businesses across a wide variety of sectors including manufacturing, marketing, financial services, travel and recruitment.