The last few years have not been kind to UK businesses. Recent research shows that the amount of UK small businesses have dropped by 6.6% since 2020 – from 5.9 million to 5.5 million. This can be mainly attributed to two factors – COVID and Brexit.
Besides the impact of the pandemic on small business operations, it’s also affected how they’re financing themselves. 56% of small businesses sought external financing in 2021 – up by 20% since 2018.
Consultancy firm Umun also discovered that 41% of SMEs reported losing a large client or experiencing difficult market conditions in 2021 – up from 29% in 2019. Their report also found that 33% of SMEs said long-term sickness absence had caused a ‘critical’ impact on company finances and business success.
As well as impacting the overall economic growth of the UK, Brexit is the other main factor that’s been impacting the UK small business market. A survey of UK SMEs from November 2021 found that 64% of UK SMEs believe that Brexit has negatively influenced the UK economy. Two in five respondents said costs had increased since the referendum – in particular costs associated with importing goods.
It’s also affecting staff hiring – 16% reported suffering a talent shortage as stricter immigration laws were making it harder to do so.
For more insights into the UK small business landscape, as well as comparison with America’s own SME market, see Startups.co.uk new infographic below: