COVID-19 has brought about a revolution in the private sector, which has seen small businesses take over as front runners at the expense of larger, slow moving rivals. Lockdown forced businesses big and small to re-examine their working practices and rapidly adapt their service offering to align to the demands of customers, with varying degrees of success. As a result, 2021 looks likely to be the year that small firms finally step up to challenge their bigger rivals.
Small businesses make up over 99.9% of private sector firms, but have been overlooked in favour of large household names for years when it comes to larger clients and contracts. However, the cumbersome nature of large businesses meant that many industry leaders struggled to adapt to the new landscape, and as such were unable to maintain their status. Debenhams, Flybe, Carphone Warehouse and The Arcadia Group are just some of the big names that succumbed to the pressure of the pandemic, while smaller nimble firms adapted quickly.
Now, support for SMEs from both the public and the government is at a high point. The sliding scale of corporation tax and the Help to Grow scheme will offer numerous advantages for small businesses to enjoy greater profits and modernise this year. While new research from Theta Global Advisors has revealed that two-thirds of the British public now trust small firms more than pre-pandemic. This comes as more people than ever before are starting businesses or going solo, with a 13% increase in new businesses created during 2020, despite lockdown disruption.
In light of this, Theta Global Advisors have commissioned nationally representative research across 2100 respondents to gain insight into the public sentiment toward small businesses:
Almost 30 million (66%) Brits say that their trust in small businesses and service providers has grown during the pandemic
Almost 1 in 5 (19%) UK workers who work at a small business report that their business has won large clients and enjoyed growth through COVID
Over 1 in 4 (26%) workers at small businesses feel that they have been successful during Covid BUT:
20% of UK workers feel that their firm was slow to react and adapt to the pandemic, resulting in a loss of staff or business (4,871,000)
Chris Biggs, Partner at Theta Global Advisors - an accounting and consultancy disruptor - has commented:
“These statistics are indicative of a period that has seen trust in tech giants, Big Four firms and those slow to adapt fall dramatically. Small firms that have survived the restrictions of the pandemic are entering into a period where trust in them is high and people want to support them to grow rapidly throughout the year.
Even without reform and regulation of the big players, the pandemic has, to a certain extent, exposed the expense of city-centred offices and all the glamour that comes with them in normal times. We allow, and always have allowed, employees to work flexibly and from home where needed and we are able to pass this comparative lack of overheads in terms of office space onto clients.
This trend looks set to carry on for the foreseeable, something that will be a boost to firms and especially those below the Big Four, and will allow startups and SMEs from sectors such as fintech, for example, to employ the best talent without breaking the bank to get the big guys in.
When small businesses work together and adapt quickly, they can be a powerful source of growth and positivity in the economy as they look to hire talent and instruct service providers.”