Taking an entrepreneurial outlook to weather the perfect storm

A year like no other

In January 2020, the UK had welcomed 200,000 new additions to its small and medium sized enterprise community, which accounts for 99.9% of its overall business population of six million companies.¹

SMEs were collectively our largest employer group, providing 16 million jobs (61% of the total) and provided over half the nation's turnover, around £2.3 trillion.²

Since then, we have endured a year like no other in peacetime. Coronavirus has tested our resilience as a global community, physically and mentally, and economically. In the UK, the Chancellor of the Exchequer developed multiple packages of measures to support businesses and their employees.³

At the same time, the government has also been reminding businesses to prepare for a seismic change in the way we trade with the rest of the world, with no confirmation yet - even at this late stage - that a deal with the European Union will be reached by the time the UK's withdrawal is completed at the end of the year.

And then there is the impact of redundancies and unemployment - which is already at a three-year high - once the Job Support Scheme on offer from the government expires.⁴ With at-risk employees lacking the financial resilience needed to weather the storm, the customer base for many small traders also starts to ebb away.

Reskilling as the basis for new business

That also brings another issue into sharp focus. How do those made redundant get back into work? One answer, suggested in the autumn by the CBI, is a major reskilling initiative⁵, a message the government had, to a degree, pre-empted with the announcement of its Lifetime Skills Guarantee programme.⁶

And maybe that is the pathway to another option. Even more of us need to become more entrepreneurial, acquiring new skills which not only give us greater traction and value in the job market, but are tradeable too - in that more of us rediscover the notion of having a skilled trade or profession that a sufficient number of people are willing to pay for in order to sustain a livelihood.

Rather than lament the likely January 2021 SME figures, we should look to focus on 2022 and 2023 to visualise the many more small businesses there could be by then, and how much more diverse it has become.

Certainly, in areas such as Derbyshire, where the small business population runs some way below the national average at around 88% of all businesses, there is a need to encourage more people to examine their skillset, their resilience and how they must respond to sustain themselves in the new economic environment, post-Brexit and, one hopes, post-pandemic.

Changing our focus and our priorities

While Brexit is likely to be a once in a lifetime occurrence, there are no guarantees about the lifespan or trajectory of Covid-19, even though we now have a vaccine already being administered which gives us all hope that it can finally be contained, if not eradicated.

What we can say, however, is that working from home, or within a smaller travel distance, or switching on to the possibilities of online transaction, has caused many to reconsider what they can achieve. Routines, needs and priorities, and, yes, the way we purchase goods and services, have changed for many, and with change comes opportunity.

To provide a local example, the Derby Economic Recovery Task Force, of which the University is a part, has busied itself with identifying how the city can bounce back from the pandemic, and the city council has recently suggested it can become a centre for innovation in fuel technologies.⁷ Such ambition will need a community of businesses and skilled professionals behind it, some of which probably do not even exist yet.

But the support for small businesses does exist. In January 2020, while the country was welcoming those 200,000 new enterprises to the official figures, the University of Derby's Business School received its Small Business Charter accreditation.⁸

On the back of this accreditation, the University is now part of a consortium running the CABS/BEIS Small Business Leadership Programme, aimed at empowering leaders to ensure business resilience and capitalise on opportunities for future growth.

No time has ever been more prescient for us to prove our value in supporting the small business sector to negotiate this perfect storm, and to help expand and strengthen the SME community for decades to come.

Find out more about the University of Derby's support for Small Businesses.

References

1. 'Business population estimates for the UK and regions: 2019 statistical release', Department for Business, Energy and Industrial Strategy, 14 January 2020
2. 'UK Small Business statistics Business Population Estimates for the UK and Regions in 2019', Federation of Small Business
3. 'Rishi Sunak turns on the spending taps again', Daily Mail, 22 October 2020
4. 'Labour market overview, UK: October 2020', Office for National Statistics, 13 October 2020
5. 'Learning for Life: Funding a world-class adult education system', CBI, 19 October 2020
6. 'Major expansion of post-18 education and training to level up and prepare workers for post-COVID economy', gov.uk, 29 September 2020
7. 'City's bid to become leading UK centre for future fuels', Derby City Council, 21 October 2020.
8. 'University of Derby Business School Awarded Small Business Charter Status', University of Derby, 7 January 2020