Growth firms in trouble
Entrepreneurs ‘running out of cash’ due to Covid
Business school has an ongoing survey (pic: Terry Murden)
Most of Britain’s entrepreneurs are running out of cash and many have been forded to halt strategic investment, according to a survey.
University of Edinburgh Business School found that COVID-19 has caused significant losses for more than half of the country’s most growth-orientated companies.
The survey analysed responses from 565 entrepreneurial businesses representing 6% of all UK businesses but playing a greater role in the UK’s economic growth. They create 50% of all new jobs and a high proportion of the country’s export and productivity growth.
The Business School’s research revealed that 68% of these entrepreneurs have cashflow concerns, up from 25% before the COVID-19 crisis.
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.
A third of companies surveyed felt the government’s Coronavirus Job Retention scheme is unlikely to benefit them and 1-in-5 think all of the relief measures do not go far enough.
This ongoing study is being led by the Business School’s Prof Francis Greene and Dr Alessandro Rosiello and 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.
Prof Greene, chairman in entrepreneurship and head of the entrepreneurship and innovation group at the School, said: “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.
The government needs to start developing a long-term plan to support these firms– Prof Greene, Business School
“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 between 1 April and 15 April 2020 among 565 entrepreneurial firms. It can be accessed via this link.
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.
Further information about the survey and how to sign up is available on University of Edinburgh Business School website is here.