SMEs reckon they’ll be seeing over eight per cent growth in 2021, with nearly four in ten (39 per cent) saying they are optimistic about their business prospects.
Almost a third (32 per cent) even say they’re preparing for the end of the national lockdown measures.
The Barclaycard Payments SME Barometer, published today, indicates that business sentiment is looking more positive at 98 points out of a possible 200. In fact, sentiment has risen steadily over the past three quarters from a low of 79 points in Q2 2020, compared to a pre-pandemic high of 110 in February 2020.
Some 24 per cent say that their output has surpassed or returned to the pre-pandemic levels of January 2020.
However, they’re still braced for short-term losses due to starting the year in lockdown, anticipating a 7.5 per cent revenue drop over the first three months of 2021.
The report also revealed that 42 per cent of business owners believe that this will be the final ‘strict’ lockdown. Of these, 70 per cent are cautiously optimistic about what’s ahead. There is more apprehension about restrictions that would affect businesses in some way though, with only 27 per cent of those thinking that business restrictions will have wrapped up by the end of April. That increases to 49 per cent predicting that restrictions will finish by the end of June.
How are SMEs preparing for post-lockdown business?
With economic recovery in sight, SMEs are preparing by:
- Increasing marketing spend (62 per cent are planning or have planned to do so)
- Saving cash (42 per cent)
- Changing their offering to suit customers in ‘the new normal’ (42 per cent)
SMEs expect that the greatest growth opportunities will be in increased footfall (21 per cent) and supply chains returning to normal (17 per cent).
Many have increased investment in technology over the course of the pandemic too. In Q4 2020, half of SMEs said they invested in digital upskilling for themselves and their staff, while in Q1 this year, 24 per cent plan to carry on even if restrictions ease, while 23 per cent intend on continuing to increase activity on social media. A significant 13 per cent view technology as their main source of growth over the coming year.
Small businesses are feeling more optimistic about employment as lockdown eases. Three in ten SMEs expect the number of full-time employees they have to increase over the course of 2021.
The way we work could also change. SMEs are planning to keep flexible working beyond lockdown, with 41 per cent saying they will continue and don’t mind where their staff are working from. Three in ten SME employers feel that staff no longer need to be on the premises to do a good job.
Kate Hardcastle MBE, an independent expert, said: “Finding new ways to work, and maximising the opportunity with new technology, has enabled some businesses to build greater engagement with customers.
“There is certainly cautiousness about the months and even years ahead, and there is no trivialising the tenacity that will be required, yet as more organisations find better working practices along the way for stakeholders, customers and local-entrepreneurism – this could also symbolise a significant turning point for many businesses.”