The FSB is calling on the coalition and the banks to give small businesses a bit of breathing space so that they can stay afloat over the festive season.
December’s severe weather conditions in the UK are thought to cost the British economy between £600m and £1bn each day. A lot of SMEs have already had a nightmare year in 2010 with confidence levels plummeting and the upcoming VAT increase means a bleak start to the New Year. The FSB now says that a lot of small entities are going to struggle to survive in the early months of 2011.
Even before the cold snap, many businesses said they expected to make redundancies and suffer hardship next year. Nearly 40% of retailers also thought business prospects in the 4th quarter would be worse than in the third and the cold weather will compound their problems.
More bad weather is on its way and some pessimists say the big freeze may last until the end of February. The FSB would like to see HMRC extend the Time to Pay scheme to help struggling SMEs, local councils delay their rent reviews and temporarily reduce the business rate bills for companies suffering financial difficulties and banks and utility companies giving breathing space to small businesses.
John Walker, the FSB’s National Chairman, said that many small businesses had banked on having a good festive season to compensate for the rest of the year. A lot of shops and restaurants took on additional temporary staff to cope with potential demand but bad weather last weekend caused a 30% drop in footfall in some areas.
At the start of the month, the CEBR warned that between 800 and 900 SMEs were under threat because of the cold weather. This figure is likely to have increased with the second wave of icy weather that blew in last week.
Small businesses are better prepared this time around than they have been in previous winters with about 40% of FSB members having made provision for staff to work at home and another 30% allowing flexible working hours.
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Image: Stuck in the snow by Cordey?
