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Coronavirus: Microbusiness owners fear they have nine weeks left before they are forced to close

One in six say they have borrowed money from family or friends: Getty
One in six say they have borrowed money from family or friends: Getty

Microbusiness owners including retailers, hairdressers and builders fear they have just nine weeks left before being forced to stop trading despite lockdown being eased.

A study of 1,000 microbusiness owners – those with less than 10 employees – revealed the pandemic has had a crippling effect on their finances.

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, cashflow issues and a constant worry that consumer confidence won’t return quickly enough are the main fears held.

Worryingly, 46 per cent of respondents admitted they have already considered permanently closing their doors because of the pandemic’s impact.

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 per cent 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 per cent 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 per cent 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, co-founder and director of The Syrup Room, a full 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.”

SWNS

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