UK’S SMALL BUSINESSES EXPECT PROFITS TO SINK THIS CHRISTMAS

More than half (57%) of small business owners in the UK expect to make less money this Christmas than during last year’s festive period – when Covid-19 restrictions still dominated lives.

The survey of over 600 small business owners, commissioned by business insurance provider Simply Business, revealed just how fundamental the festive period is for SMEs – with one in five (20%) making over 20% of their annual revenue during this period alone.

Alarmingly, without a strong December, one in 10 (10%) owners say they’re at risk of shutting permanently. Meanwhile, one six (16%) say they’d need to consider taking up additional employment.

Despite the UK not having any Covid-19 restrictions in place this Christmas, the majority of owners still expect to take less, as consumers around the UK feel the impact of a cost of living crisis. One in three (30%) predict losses of up to £1000, and a tenth (8%) believe their profits will shrink by up to £5000.

Cost of living crisis taking its toll on SMEs

It comes as small businesses are already themselves navigating the challenges of rising costs. Two thirds (65%) of owners feel rising costs are their single biggest challenge heading into 2023 – so much so that a quarter (26%) are worried that they won’t even be able to pay their energy bills in 2023.

This is at a time when many are still in recovery mode. Over two years on, one in six still believe that they will never financially recover from the pandemic.

Owners forced to work throughout Christmas, despite ‘bad’ levels of wellbeing

The reliance on the festive period is forcing many to work throughout the holidays despite a fifth (21%) rating their mental health as ‘bad’ or ‘very bad’.

More than one in three are set to not take any real break in December – with one in 10 (13%) working the whole of the festive period, and 23% needing to check emails, take calls, and process orders throughout.

Ahead of Christmas, Simply Business is urging people to spend their money with small businesses.

Alan Thomas, UK CEO at Simply Business, commented: “Amidst a cost of living crisis, when so many are still in recovery mode from the £126.6 billion impact of the pandemic, this Christmas is – quite simply – a lifeline for small businesses.

“The self-employed are feeling the pressure from the current economic climate more than most, so it’s worrying that the majority of owners expect to take less money than previous Decembers. They are inevitably feeling the squeeze as they struggle to pass on rising costs to their customers. What’s more, the cost of living crisis is having a clear impact on consumer purchasing behaviour, which is another blow to the pockets of small business owners.

“Small businesses account for 99% of all British businesses, contributing trillions of pounds a year in turnover. The recovery of our economy and communities is directly linked to their success. We must support small businesses all year round, and there’s no better time to start than during this incredibly important festive period.”