Small and medium business enterprises (SMEs) in the United Kingdom are facing an uphill battle to remain afloat. According to MoneyTransfers.com, one-fourth of small-to-medium enterprises in the United Kingdom are struggling to survive in 2022.
Speaking on the data, Jonathan Merry, CEO of MoneyTransfers.com, said:
SMEs are the backbone of the British economy. However, they are also among the most vulnerable businesses during times of economic uncertainty. The COVID-19 pandemic has devastated SMEs, forcing them to close their doors for good. The current state of the economy is putting immense pressure on SMEs. The government needs to do more to support these businesses, or we risk seeing an increase in business failures in the coming years.
Jonathan Merry, CEO of MoneyTransfers.com
A worrying “guidance gap” is emerging, with SMEs not knowing where to turn for advice. Only 5% of SMEs turn to big companies, and only 6% turn to business mentors. This is deeply concerning, as it suggests that many SMEs are not getting the support they need to survive and thrive.
The SMEs’ Psychological Wellness Dilemma
SMEs are not only struggling to survive financially, but they are also facing immense pressure when it comes to their physical and mental health. SMEs are under immense pressure from the economy, operations, and finances. This pressure affects their physical and mental health, with many SME owners reporting high stress and anxiety levels.
The psychological well-being of SME owners is closely linked to the performance of their businesses. This suggests that the more pressure SMEs are under, the worse their mental health will be.
Most entities that offered loans to SMEs during the pandemic are back to collect. However, SMEs are not on their feet, making it difficult to honor their obligations. The pressure that comes with debt is tormenting and makes business owners lose their sanity.
The government should be flexible and extend the COVID-19 loan repayment timelines. The extension will reduce the pressure on the SMEs and thus ease the mental pressure.
Despite the Struggles, SMEs Must Be Optimistic
Reducing debts and other financial obligations gives SMEs a better chance of survival. They should also invest in automating some of their processes and look for ways to cut costs. Additionally, they can form partnerships and collaborate with other businesses in their supply chains.
Most importantly, SMEs need to be more innovative and adaptable to change. This will help them survive in the current economic climate and thrive in the future.
The government should also develop policies that will help SMEs recover faster. The right policies will ease these businesses’ financial, operational, and psychological pressures.