The research found 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.”