SMEs in the hospitality and leisure industries have been the hardest hit by the pandemic, losing on average 54% of their monthly business income, new research has revealed.
SMEs in the food and drink industry come in a close second, losing 52% of their monthly income, according to specialist bank Aldermore.
Strict government rules around social distancing, mean businesses in sectors which traditionally require close face to face human interactions have on average lost the largest proportion of their monthly business income.
A full sector breakdown can be found in the table below. All sectors in the UK have faced massive challenges, with the average SME losing over a third (34%) of monthly business income as a result of the crisis.
“Conditions are extremely tough for UK businesses at the moment. The pandemic has resulted in companies within the hardest hit sectors struggling to survive,” said Tim Boag, Group Managing Director, Business Finance at Aldermore.
“Small changes within a business can go a long way in preserving much needed capital. Even when the lockdown eases, business income will take time to recover and SMEs must continue to adapt to the ‘new norm’.”
SMEs in the legal sector have on average been the least affected by the pandemic, losing 11% of their monthly business income. Advances in legal technology such as virtual courtrooms have allowed many law firms to continue working on cases remotely.
Legal professionals have also come up with new ways to continue offering services such as Wills, which require witnesses to be present, while still abiding by strict social distancing measures.
Innovation has been one of the key factors influencing the impact the pandemic has had on businesses. SMEs in the manufacturing sector have been the most likely to have made adjustments to their business as a direct result of COVID-19 (56%).
Unfortunately, even by adapting their businesses, one in ten (11%) businesses believe they can only survive under current circumstances for approximately five months.
SMEs in the hospitality and leisure sector have been the worst affected by the COVID-19 pandemic losing 54% of their monthly business income