Covid-19 restrictions are biggest risk to small businesses

Covid-19 restrictions are the biggest risk to small businesses in the coming months, while a gap is emerging between small firms doing well and those facing significant threats due to the pandemic, are the findings of a new survey.

According to the latest Small Business Sentiment Survey from the Small Firms Association (SFA), over one third (35 per cent) of SFA members feel that the business environment is improving, with 33 per cent of SFA members reporting a weakening, compared to 17 per cent in winter 2019.

Sven Spollen-Behrens, SFA director, said that while the winter could be “ very difficult winter”, small businesses remain resilient.

“The majority of respondents intend to keep wages at their current levels or to award pay rises where the business performance allows. However, a number reported having to decrease working hours, pause or cancel recruitment and let staff go temporarily, therefore, it is not surprising that 14 per cent are considering lowering pay rates, compared to 1 per cent in winter 2019.”

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Nearly two out of three survey respondents (61 per cent)intend to grow their businesses through investing in their brand, staff and Brexit proofing their organisations, in the coming months.

Ahead of budget day, small businesses are hoping the Government will support Ireland’s small business community so they can work alongside health and business restrictions and prepare for a post-Brexit environment.

Rainy day fund

Meanwhile SME Recovery Ireland, a platform representing Ireland’s small and medium business sector , is calling again for the establishment of a National Agency for Small Business, which would be overseen by a dedicated Minister for Small Business.

Noting that some 800,000 employees in small businesses are not supported through a state agency such as the IDA and Enterprise Ireland, John Moran, chair of SME Recovery Ireland, said that the creation of such an agency would allow for a more coordinated approach to the development and implementation of State policy across the SME sector.

“It would also ensure that public policy across government recognises the contribution of small businesses and that laws and regulations are not excessively complex and onerous for small business owners. For example, legal, tax and regulatory rules and regulations could be more easily streamlined for SMEs, in recognition of their small scale and unique characteristics.”

Other budget day proposals put forward by the group include the creation of an SME Rainy Day Fund, an SME Resilience Fund, and financial literacy supports for business owners.