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COVID-19 better for business than Brexit say Scottish SMEs

A survey of over 300 Scottish SMEs has found businesses see more potential benefits from Covid-19 than from Brexit.

14th September 2020

  • Over half (52%) think COVID-19 will result in positives compared with 38% for Brexit
  • Employee mental health remains a key concern for businesses, with 61% finding it a challenge during pandemic
  • Nearly 2/3rd (64%) are concerned about their ability to survive a second wave or future pandemic

The research carried out by Scotland’s national business advice service, Business Gateway, identified that although the pandemic is a concern for over three-quarters of businesses (78%), over half (52%) anticipate some positive changes. These included more efficient working practices and greater resilience to the impacts of future pandemics, in comparison to 38% who expect positive outcomes from Brexit.

Over half of Scottish businesses cited concerns that Brexit would result in increasing taxes or overheads (60%), exchange rate fluctuations (54%), impacts on their supply chains (52%) and a loss in sales (51%).

Almost two-fifths of SMEs agreed Brexit will mean significant changes to their working practices (38%) while 35% feel well prepared for when Britain exits the EU. A third (33%) anticipate that they will have to restructure their business in response to the changes.

In comparison, respondents were more likely to cite positive impacts because of COVID-19, with over half expecting to streamline their working practices more efficiently (56%) and feeling being better prepared in the case of a potential future pandemic (53%).

Despite this growth in confidence, there were still concerns relating to the pandemic, as 64% still expressed worries about surviving a second wave or another future pandemic.

Employee mental health was also a key concern for 61% of businesses, while 58% said that ensuring staff wellbeing during the pandemic has been a challenge.

Steven Heddle, Chair of the Business Gateway Board and COSLA’s Environment and Economy Spokesperson said: “Market conditions for Scottish businesses have never been more difficult. Many are still attempting to shore up resilience and survive the pandemic, while also preparing for significant trade disruptions following Brexit.

“These findings underpin the critical role that support services must play in ensuring that businesses feel prepared and confident in their ability to survive this uncertain period. I would urge all owners and entrepreneurs to use the Business Gateway service to help identify strategies so that they can overcome future challenges.”

These findings coincide with the launch of a national Business Gateway campaign to ensure businesses are aware of and have access to the critical support they need during these challenging economic times. Free support available includes 1:1 advice with local business advisers, online resources including webinars and online tutorials, and research services.

*About the research

Fieldwork was conducted online by 3Gem, from 19th to 27th August 2020, amongst 500 Scottish adults, split into two sample groups as follows:

  • n=354 x SMEs (1-249 employees) business decision-makers.
  • n=146 x potential start-ups.

Sample was split across North (incl. Aberdeen), South West (inc Glasgow) and South East (inc Edinburgh).