Two-thirds of SMEs in England feel more prepared for second lockdown

• Business owners knew what to expect going into this lockdown, and had made changes to make their company more resilient
• SMEs across the UK are going online to stay ahead, with just under half increasing their online presence since March 2020
• Barclaycard Payments data shows sustained growth in online payments to SMEs, with e-commerce transactions up 6 per cent since last quarter
• Almost three quarters of SMEs are looking to invest in their business over the next 12 months

As we approach the end of an unpredictable and tough year for businesses, Barclaycard Payments’ latest SME Barometer has found that two-thirds (66 per cent) of small and medium-sized enterprises in England feel more prepared for the current national lockdown than they did for the first lockdown in March.

The top reasons given for this outlook are mental preparation (36 per cent), the changes they’ve made to their business to make it more resilient (32 per cent), and the Government support in place (14 per cent).

Across the UK, many SMEs are also turning to e-commerce as a way of recapturing some of the opportunities they’ve missed out on, with just under half (45 per cent) increasing their online presence since March 2020 – with website improvements (67 per cent), putting services online (66 per cent) and social media advertising (64 per cent) cited as the measures which have had the most positive impact.  Half of business owners (50 per cent) also reported investing in improving digital skills, either for themselves or their staff.

Barclaycard Payments data show that small businesses are being rewarded for adding the ability to take online payments, with e-commerce transactions at SME merchants up 6 per cent since last quarter, and up 16 per cent year-on-year.

All eyes on 2021

Looking ahead to next year, nearly three quarters (74 per cent) of business owners are planning to invest back into their business. The most popular areas for investment are marketing (29 per cent), and new equipment / technology (28 per cent). SMEs are also embracing the shift to ‘working from home’ for the long-term, with over a fifth (22 per cent) planning to invest in working from home or productivity tools.

Prior to the lockdown announcement for England on 31st October, almost two-thirds (63 per cent) of SMEs expected to return to 2019 levels of output by the end of 2021, although the latest restrictions may make this less achievable for some businesses.

Konrad Kelling, Head of Small Business, Barclaycard Payments, said: “The past year has been incredibly difficult for SMEs across all sectors, so it’s reassuring to see that many have been able to take advantage of the lessons learned during the first lockdown to adapt their business ensuring that they are able to continue to serve their customers.  

“At Barclaycard, we want to support all of our clients and are working closely with those impacted by current circumstances by providing care packages to help them navigate the challenges they face.”

As businesses continue to adapt to lockdown and a post-COVID economy, Konrad recommends that SMEs:

1. Invest in the “new normal” – it might sound like a cliché, but we’re unlikely to return to the world as it was before the pandemic. Investing in your online presence and 'working from home' tools is not just a way of preparing for another lockdown, it’s a way of preparing for the future. 
2. Make sure people know who’s behind your business – many customers are looking to support their local SMEs during these tough times, so make sure your customers know the stories and people behind your business.
3. Try to think beyond crisis mode – with so much going on, SMEs can often feel like they are constantly firefighting. As hard as it can be to find the time, SMEs should try to balance their short and long-term goals.  
4. Seek out support – SMEs need to remember that they are not alone. Whether it’s from the Government, your bank, or peer networks such as Enterprise Nation, it’s important to ask for help during this difficult time.
5. Harness the power of social media – social media is a great channel to keep customers engaged by sharing your story, and the story of your business. It is also a way of sourcing inspiration and motivation from other businesses facing similar issues.

Emma Jones, founder of small business network Enterprise Nation, says, “SMEs have again and again proved their resourcefulness and flexibility in this crisis. They have been proactive in looking at ways to adapt their business for a COVID economy – with investment in online tools, and having staff working from home all crucial to their ability to ride out the latest round of pandemic disruptions. In light of all of the economic setbacks, SMEs are hopeful that 2021 could bring back a degree of normality – and we are hopeful that they will persevere.”

Wasel Ali, Owner, Paradise Indian Restaurant, said:

“The first lockdown was a real shock for us. Having mainly operated as a sit-down restaurant, with a small click-and-collect takeaway option, for over 50 years – we suddenly had to adapt and launch our own home delivery service.

“While we knew our customers on first name terms, we realised that we had no way to contact them or let them know that we were still operating. Luckily word-of-mouth got round, but over the past few months, we’ve been forced to think outside the box and develop as a business.

“We’re now in a much better position. Since the first lockdown, we’ve set up a new kitchen exclusively for takeaway orders, have begun developing a social media presence, and are designing our own app so that customers can order with us directly.

“My advice for other SMEs is to try and stay calm and identify where, despite the restrictions, you can still make sales – however small they may be!”

Notes to editors

About the Barometer and input breakdown

*To measure SME sentiment, Barclaycard and YouGov have aggregated SMEs’ viewpoints on ten key topics to create an overall index score out of 200, with anything over 100 indicating a positive outlook, while anything under 100 is negative. The breakdown of key topics is below, including the change in sentiment score for each category from the Q3 Barometer.

NOTE: Micro businesses are defined as any business with a turnover of under £2m. Small businesses are those between £2m – £10m. Medium-sized businesses are £10m - £25m.

Barclays has facilitated a total of £25.057 billion into the economy through the following schemes.

As of close of business Sunday 8th November:

BBLS

• Approved – 306,420
• Value – £9.51 billion

CBILS

• Approved –  9,876
•  Value – £2.32 billion

CLBILS

• Approved – 115
•  Value – £742 million

CCFF

As of close of business Monday 9th November:

• We’ve facilitated £12.485 billion of commercial paper issuance for clients, representing 39.7% of total funding under the scheme [39.7% of total BoE CCFF funding as of 4th November]

Find out more about the businesses that we are helping to manage the impact of the COVID-19 pandemic here.

For more information, please contact:

Barclaycard:
Oliver Stevenson, Media Relations, +44 (0) 788 018 4177 | oliver.stevenson@barclaycard.co.uk

About the data

Research was conducted online by YouGov on behalf of Barclaycard Payments between 5 October – 29 October. YouGov polled 573 senior members of staff working in UK SMEs, weighted by region to reflect SME distribution in the UK.

Following the UK lockdown announcement at the end of October, YouGov also ran a separate survey between 4 November – 9 November across 547 respondents. This survey was weighted to ensure consistency with the original Barometer survey in terms of region and sector profile.

*The term SME is defined in the release as: all three categories below, determined as a weighted percentage. Individual categories are defined as follows:

• Micro businesses under £ 2 million turnover.
• Small businesses are defined as those with a turnover of £2-10 million.
• Medium sized businesses are those defined with a turnover of over £10 million and up to £25 million.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2019 we processed over £272bn in transactions globally. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.

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