Initial results from a nationwide survey conducted by University of Edinburgh Business School show that 68% of the UK’s most dynamic entrepreneurs have cashflow concerns, up from 25% before the COVID-19 crisis.
The survey analysed responses from fast growing entrepreneurial businesses. These firms represent 6% of all UK businesses but play an outsized role in the UK’s economic growth, providing 50% of all new jobs and a high proportion of the country’s export and productivity growth.
Additional findings show that almost half of businesses surveyed have halted all strategic investment, 59% are seeing a significant fall in business turnover and 51% are experiencing supply chain issues. One third of companies surveyed felt the government’s Coronavirus Job Retention scheme is unlikely to benefit them and 1-in-5 think all of the relief measures do not go far enough.
Follow-on surveys will be conducted in the coming months to gather information on business performance over the summer. Businesses taking part in the survey will provide information on the current state of their operations, including employee numbers and turnover figures.
This ongoing study is being led by Prof Francis Greene and Dr Alessandro Rosiello from University of Edinburgh Business School and aims to provide up-to-date information about the prospects of entrepreneurial firms in order to guide the government response to the COVID-19 crisis.
Prof Francis Greene, Chair in Entrepreneurship and Head of the Entrepreneurship and Innovation Group at University of Edinburgh Business School said: “COVID-19 has caused significant losses for over half of our most growth-orientated companies and stalled a substantial proportion of the investment these firms would have otherwise made in growing their business.
“These firms are the key growth engine of the economy and of the nation’s export trade. We will depend on their entrepreneurial dynamism to repair the UK economy after COVID-19. The government needs to start developing a long-term plan to support these firms after the lockdown ends when many will have little or no revenue.”