Firms report cash flow concerns as crisis hits
A nationwide survey of the impact of Covid-19 on business shows 68% of the UK’s entrepreneurs have cashflow concerns.
Results from a study by the University of Edinburgh Business School show that 68% of the entrepreneurs surveyed highlighted problems with cashflow - up from 25% before the Covid-19 crisis.
Researchers analysed responses from 565 fast growing entrepreneurial businesses. The firms represent 6% of all UK businesses but play an outsized role in the UK’s economic growth, providing 50% of all new jobs and a high proportion of the country’s export and productivity growth.
Findings show that almost half of businesses surveyed have halted all strategic investment, 59% are seeing a significant fall in business turnover and 51% are experiencing supply chain issues.
One third of companies surveyed felt the government’s Coronavirus Job Retention scheme is unlikely to benefit them, and one in five think all of the relief measures do not go far enough.
Follow-on surveys will be conducted in the coming months to gather information on business performance over the summer.
Businesses taking part in the survey will provide information on the current state of their operations, including employee numbers and turnover figures.
Prof Francis Greene and Dr Alessandro Rosiello lead the ongoing study from University of Edinburgh Business School.
It aims to provide up-to-date information about the prospects of entrepreneurial firms in order to guide the government response to the Covid-19 crisis.
Covid-19 has caused significant losses for over half of our most growth-orientated companies and stalled a substantial proportion of the investment these firms would have otherwise made in growing their business. These firms are the key growth engine of the economy and of the nation’s export trade. We will depend on their entrepreneurial dynamism to repair the UK economy after COVID-19. The government needs to start developing a long-term plan to support these firms after the lockdown ends when many will have little or no revenue.
The initial part of the survey was carried out 1 April and 15 April among 565 entrepreneurial firms.
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