The freezing December weather caused 38% of small businesses to close and a further 41% to operate without their full complement of staff. The cost to the small business sector was in the region of £2.1bn.
397 SME owners were surveyed by XLN Telecom and 38% of the respondents said they had to close for between 1 and 4 days as a result of the snow and ice. Shutting up shop obviously has an effect on turnover and 31% predicted that each lost day cost them between £500 and £1000, whilst 18% predicted losses would be more than £1000.
The heavy snowfall last month affected all areas of the UK and this in turn affected private sector growth. Six out of nine of the English regions showed weaker rises in business activity, according to the Regional PMI from Lloyds TSB. The service sector was one of the hardest hit, with restaurants, hotels and retailers suffering badly.
The bad weather and the VAT increase have both dented the confidence of small business owners. At the end of last year, confidence had dropped to a lower level than it was at the start of 2010. In fact business confidence dropped further during each quarter of 2010 and ended the year with a reading of -13.2 on the FSB’s Small Business Index.
Small businesses also expect to see weaker employment growth in the next few months; 12.4% expect to make redundancies, while just fewer than 10% believe they may be able to take on more staff.
However, there will always be times when companies need additional staff to meet peaks in demand and this could lead to an increase in opportunities for umbrella company contractors over the coming months.
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Image: What? by Adam NFK Smith
