Simply Business spoke to over 500 SME owners across the UK and also found that a third (32%) feel they’d be impacted worse than the first lockdown but would survive. A further third (34%) feel a second lockdown would have the same impact as the first and just 5% think they would cope better than the first.

When looking at business recovery, around a quarter (24%) of businesses think it will take 12-18 months to recover the money lost during COVID-19. One in five (19%) think 6-12 months and one in 10 (12%) think 18-24 months. A further tenth (12%) think it could take a staggering 2-3 years.

In terms of customer numbers, the report found that a quarter (24%) of small businesses also believe it will take between 6-12 months for their customer numbers to return to normal. Well over a tenth (14%) think it could be over a year.

Encouragingly, 68% of small business owners expect their employee numbers to remain the same.

However, one in five (21%) expect it to decrease, the majority of which (13%) expect it to decrease significantly, putting a risk to employment levels across SMEs.

The study also showed that 62% of SME owners feel less confident about the long term prospects of their business.

The majority do, however, feel comfortable about resuming trading whilst adhering to government guidelines. Within this, 43% say they are ‘comfortable’ and a further 30% are ‘very comfortable’.

Despite the overall challenges, there are some positives to come out of lockdown. A quarter (25%) of SME owners say their staff have learnt new skills, one in five (21%) have found new customers, and 19% of SMEs have adopted new technologies. Almost one fifth (17%) have even expanded to offer more products or services.

Technology has arguably had the biggest impact on how well a business has been able to survive lockdown, with 42% of SME owners saying they are more reliant on technology now because of coronavirus.

Just under half (47%) are using messaging apps more (such as Facebook Messenger or Whatsapp) for business, a third (33%) have increased their use of social media, 36% have introduced contactless or online payment systems, and a quarter (25%) have started to use online delivery services.

Alan Thomas, UK CEO at Simply Business, commented: “The nationwide lockdown has had a significant effect on all businesses – from the very largest to the smallest. And our research has highlighted the potentially fatal impact that further lockdowns could have on many small businesses in the UK.

“Few have been financially harder hit than SMEs, small businesses, and the self-employed, and it’s telling that many live in fear of another lockdown and the consequences it would have on their business.

“It’s promising to see the level of resilience and innovation in the small business community – the greater adoption of technology, and learning of new skills is a real positive and bodes well for the future.”

He added: “However, whilst business owners are innovating, they are still reliant on macro-economic policy. Government’s decision to implement local lockdowns could decide the fate of many small businesses.

“SMEs account for 99% of all UK businesses, and contribute a combined £2 trillion annually. Put simply, we need small businesses to bounce back if we’re to recover economically.

“This is why we’ve launched a £10,000 Business Boost grant. We’ll be giving away £10,000 to one entrepreneur – to help them start or revive their business – providing a financial boost, and potentially a lifeline, in these economically challenging times.”