Overview
The Coronavirus outbreak and the introduction of lockdown measures on March 23 of this year have changed the way of life for millions of people in Scotland. It has led to previously unimaginable circumstances for the economy - mass business closures, deserted cities and towns, tens of thousands of workers sitting idle on furlough and whole industries contemplating their future - in just ten weeks.
A new normal has been created in which Scotland is gripped by a health and economic emergency that threatens both the long-term health and wealth of the nation. With the Scottish economy contracting by a third many small businesses have responded tenaciously. A third have quietly and effectively innovated to stay in business by, for example, selling online, launching community based delivery services or producing PPE, hand sanitiser and other health-related goods and services for the NHS, care homes and consumers.
That said, the majority of small businesses have been hit hard by a situation out of their control. As a result, over a third of those who have closed do not know if they will be able to reopen.
Using our latest survey data from almost 800 businesses in Scotland, together with our latest confidence tracker, this short paper explores the impact of the crisis on small firms. It also sets out a range of actions that central and local governments could take to support small businesses, as the country moves tentatively out of lockdown.
Ten facts about Small Businesses and Coronavirus
The Business Impact of Coronavirus
Small businesses in Scotland have been hit hard by the Coronavirus pandemic and are struggling to maintain their viability. The introduction of lockdown measures for non-essential businesses over two months ago has led to the temporary closure of half of small businesses in Scotland and a substantial impact on cashflow for almost all firms.
These businesses have been hit hard by the Coronavirus pandemic and are struggling to maintain their viability. The introduction of lockdown measures for non-essential businesses over two months ago has led to the temporary closure of half of small businesses in Scotland and a substantial impact on cashflow for almost all firms.
What next for small businesses?
The current extraordinary circumstances mean that the stark nature of these results will surprise few.
Finding solutions to existing objectives – for example, how to encourage small firms to adapt to a net-zero economy, or addressing fair work – will be even more challenging than before. If, as seems likely, addressing these major challenges forms the core of economic recovery strategy, then small businesses must be at the centre of any policy design.
What follows is a collection of five actions government could take to help small businesses re-open, while ensuring that our approach to recovery helps them thrive.
Read the full report
To read the full report including all the research, statistics and references please click below.