The latest Small Business Index (SBI) published by the FSB paints a bleak picture of the small business sector, with a record number of firms planning to close over the next 12 months.
Data for Q4 2020 was collected from a survey of 1,401 small firms at the end of December 2020. Among a swathe of troubling findings, the headline confidence figure fell to its second lowest level in the report’s 10-year history, with only March 2020 yielding a lower figure.
Four out of every five respondents said they did not expect their performance to improve over the coming three months. Almost a quarter of those surveyed also said they had decreased the number of people they employ during the three-month period to December, while one in seven expect to cut numbers in the first quarter of this year.
Perhaps the most stark finding, however, was that just under 5% of firms expect to close at some point this year. This proportion is an all-time high and implies that around 250,000 UK small businesses are set to fold if no further government support to cope with the pandemic is forthcoming.