Small business owners are reporting a mental health and welfare crisis as they wage a constant battle to save their businesses, according to a survey from ACCA UK (the Association of Chartered Certified Accountants) and The Corporate Finance Network (CFN).
The SME Tracker for March revealed that one in seven bosses (13.6%) were feeling unable to cope with work pressures, with another one in 13 (7.5%) reported having intrusive negative thoughts or suicidal feelings. Both figures were a substantial jump from the summer, when only one in 200 reported having suicidal or negative thoughts.
Generally, 24% said their mental health was worsening, due to the stress and challenges of keeping their businesses afloat amid the global pandemic.
The survey reported data from accountants representing 6,000 SME clients and ran until yesterday.
The tracker also unearthed a worrying trend for SMEs to bury their heads in the sand when it comes to forecasting their financial requirements and applying for loans to fund the reopening of their businesses and trading for the next 12 months.
Accountants said that more than one-third (37.5%) had not considered how to fund the coming months when it is hoped that trading will resume, requiring adequate cash flow.
And 50% of clients were only confident enough to borrow up to 15% of their net earnings to fund continued trading – revealing a reluctance to take on more debt in an unpredictable situation.
On a more positive note, all respondents were confident they would be able to access the right skills to support recovery, with 75% committing to spending more on skills and training in the next six months.
Kirsty McGregor, founder of The Corporate Finance Network, said: ‘It’s a concern that SMEs are not forecasting how much cash they will need to resume trading over the next 12 months. There’s obviously a reluctance to take on debt, which could be down to a lack of clarity over what the future will bring.
‘This doesn’t bode well for the government’s new recovery loans, which may offer less favourable terms than their predecessors, and will be pitched now at owners with a strong aversion to taking on more debt.’
Claire Bennison, head of ACCA UK, said: ‘Small business owners have faced the most challenging year imaginable to save their businesses and it’s distressing that so many are facing mental health issues.
‘Sadly, among all the announcements in the Spring Budget, there was no mention of any measures to help the business community with their wellbeing, which was a big disappointment.’
For media enquiries, contact:
+ 44 (0) 7538 258897
Notes to Editors
About the ACCA UK and The CFN SME Recovery Tracker
This edition has sought views from accountants working in practices advising some 6,000 SME clients. The data for this poll closed on 10 March 2021.
About SMEs: SMEs, (typically less than 250 employees), account for 99.9% of the private sector employment in the UK and there are 22 million employees working for these private sector businesses.
About ACCA: ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 227,000 members and 544,000 future members based in 176 countries and regions that upholds the highest professional and ethical values.
We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.
Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.
Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow. Find out more about us at accaglobal.com
About The Corporate Finance Network: The Corporate Finance Network – www.thecfn.org.uk - The Corporate Finance Network consists of some of the most proactive and commercially astute regional, independent accountancy firms in the UK. They specialise in providing corporate finance advice for smaller transactions. Kirsty McGregor can be contacted at info@TheCFN.org.uk