Gift Focus inc Attire Accessories - September/October 2020

43 FSB BUSINESS FEATURE CHANGING LANDSCAPE Mike Cherry, FSB national chairman, looks at the changing economic landscape amidst the COVID-19 pandemic Small businesses are the lifeblood of the economy but the COVID-19 pandemic saw trade crumble under the weight of the lockdown. Many were faced with tough decisions, and the effects of these will likely be felt for years to come. But if there’s anything the pandemic has taught us; it is that small businesses are nothing if not resilient and the show must always go on. Businesses breathed a collective sigh of relief when non-essential retail shops reopened across the UK in June. This signalled a positive step forward as traders tried to repair some of the damage the pandemic wreaked on the high street. Road to recovery So far, trade has begun to recover, and it’s clear that many customers are excited to visit shops they have not seen in three months, many of whom have restocked and innovated in that time. Pubs, bars and restaurants have also now been allowed to reopen, bringing footfall back to what used to be thriving high streets. This will bring another cluster of hope to small businesses rebuilding their livelihoods after the biggest economic upheaval in living history, especially after the Government announcement to provide 50 percent off to people dining out in August, on top of a targeted VAT cut from 20 percent to 5 percent for food, accommodation and attractions. However, as the R rate continues to rise and fall in some areas, the threat of localised lockdowns is always looming. While businesses are trying to stay positive about the future, it’s going to take some time to rebuild confidence as they adjust to a new normal. In an effort to kickstart the economy, the Government reduced the two-metre social distancing rule to 1 metre plus, which Chancellor Rishi Sunak said would make an “enormous difference” to businesses. This has allowed many to open at a reasonable capacity, allowing them to get back to business in a way that means they can start to turn a profit. For others, it means making structural changes in order to comply with the latest government requirements. This includes putting screens up to protect and signposting to limit the number of people – expenses which add up, particularly at a time where businesses have little to spare. Adapt and conquer The one metre plus rule also requires face masks to be worn at all times and asking customers to comply can be a challenge. Business owners also want confidence that the track and trace system will work to back them up. While these make a large number of businesses potentially viable, money will continue to need to be spent on resources to enable the protection of staff and customers. This could see smaller businesses disproportionately impacted as they won’t have the reserve capital to swallow this expense up, after facing costs during lockdown but without the ability to raise revenue. Adapting is key in any unprecedented situation, and this one is no exception. While some have flocked to their local high streets, others are still not comfortable with the idea of face-to-face shopping. But this doesn’t need to be the death knell for the high street. Online offerings During the lockdown, we saw 16 per cent of small shops pivot to online to offer services, a figure we expect to rise as shops adapt to a new normal. Many were already looking to branch out digitally, so for a number of businesses, the pandemic simply accelerated this move. Recent FSB research also shows that half of small firms have changed some aspect of their business offering in response to the COVID-19 crisis. Some businesses have changed their entire model, switching their offering to supply a doorstep delivery service. It is too early to predict whether these changes are temporary, or whether businesses will continue to offer these services alongside their usual offering. As we look towards recovery, we want to see people being encouraged to grow as the situation continues to improve. ABOUT FSB As the UK’s business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. Yo u can follow us on twitter @fsb_policy and on Instagram @fsb_uk.