"While 2021 offers all of us hope for a national recovery, small businesses especially are looking forward to emerging from coronavirus uncertainty."
SMEs predict an 8.1% rise in revenue in 2021, and nearly four in ten (39%) say they are optimistic about their prospects. Though the future still looks uncertain for many, nearly a quarter (24%) say their output has already surpassed or returned to the pre-pandemic levels of January 2020.
The quarterly Barclaycard SME Barometer also shows business sentiment is starting to look more positive, at 98 points out of a possible 200. While any score under 100 indicates negative sentiment, this is the highest score reported since the beginning of the pandemic. Sentiment has risen steadily over the past three quarters from a low point of just 79 points in Q2 2020 compared to an initial pre-pandemic high of 110 in February 2020.
However, though cautiously optimistic, SMEs are still weary of continued upheaval, and are braced for further short-term losses, anticipating an initial revenue drop of 7.5% over the first three months of this year.
The report reveals that four in ten (42%) SMEs think the current lockdown will be the final ‘strict’ or national lockdown and, of these, 70% are optimistic or cautiously optimistic for what’s next. However, there is more apprehension when it comes to restrictions that affect businesses in some way with only 27% thinking restrictions that impact them will end by April, rising to 49% by June.
When economic recovery does get underway, the top ways SMEs are preparing to take advantage of it is by increasing marketing spend, with 62% having done so or planning to; saving cash (42%); or changing their offering to cater to customers once life opens back up to a ‘new normal’ (42%).
Ecommerce will also continue to be key; though overall spend (including in-store transactions), was significantly down, Barclaycard Payments data for the first five weeks of 2021 shows the average daily value of online SME transactions is up 6% compared to the same period in 2020.
The other key aspect affecting SMEs is the UK’s departure from the European Union, with international trade accounting for 23% of SME revenue before the pandemic. With the UK now setting its own trade policy, SMEs are looking for new global opportunities, citing the most positive aspect of leaving the EU being the possibility of new trade deals in countries outside of it (19%).
Rob Cameron, CEO of Barclaycard Payments, said: “While 2021 offers all of us hope for a national recovery, small businesses especially are looking forward to emerging from coronavirus uncertainty.
“SMEs have proven their agility, adapting quickly to get online, catering to a nation stuck at home and changing how their teams get the job done. While the world may be returning to some form of normal this year, small businesses have realised the benefits of flexible working and digital skills, with many already looking at what improvements they can take forward into 2021. As a banking and payments partner, we’re here to help our SME customers get online at this crucial time, and finance the changes they need to prepare for whatever comes next.”
