How are small businesses preparing for Freedom Day?

As the government’s new deadline draws near, Startups looks at how SMEs are feeling about the prospect of running a business free from coronavirus restrictions.

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On 19 July, the government is scheduled to formally announce the lifting of all social contact rules across the UK.

The date has been branded as ‘Freedom Day’ – and for small business owners, having now endured almost eighteen months of national lockdowns and varying levels of restrictions, it can’t come soon enough.

But given the recent month-long extension to the original deadline of 21 June, there has so far been a lack of clarity over further delays, throwing up questions about future financial support and how best to prepare for the change.

As the big day approaches, we ask SMEs for their thoughts on the challenges that Freedom Day might bring.

How have coronavirus restrictions affected SMEs? 

It’s no secret that COVID-19 has made the past year a difficult time for small businesses. A recent report by Simply Business estimates the total cost of coronavirus restrictions to be upwards of £126.6 bn, at an average expense of £22,461 per company.

Figures compiled by the Local Data Company (LDC) show that over 17,500 chain stores were forced to close in 2020. Small and local firms in particular have struggled to increase footfall while adhering to social distancing measures, due to a lack of space.

The re-opening of the UK’s high streets in May 2021 has helped to bandage some of the wounds. Thankfully, we are starting to see signs of recovery – most notably in the jobs market. However, with consumers still being encouraged to avoid meeting indoors, the most vulnerable industries are those which rely on in-person experiences, such as retail and hospitality.

Chris Sanderson is founder of tech startup Limber, an app that helps to connect staff in the hospitality industry with venues which have flexible shifts. He says his users are currently reporting “Christmas-like levels of demand” – with around half the staffing levels. “COVID-19 restrictions have made hospitality more labour intensive than ever. What should be a period of welcome profitability for the industry after a tough year is becoming really challenging.”

The full lifting of restrictions will likely have a positive impact on the growth and survival of pubs, restaurants, shops, and salons across the country. Yet some of the startups we spoke to seemed cautious about beginning celebrations too early.

What has been the reaction to the announcement?

Rob Hill is founder and CEO of Fizzbox.com, an experience platform which helps people book activities for everything from paintball to afternoon tea. The company relies on a wide variety of industries to operate, and Rob says he feels “uncertain” that July 19 will happen, “especially due to the obstacles we have all had to face so far. Freedom Day makes a huge difference to the operations of our day-to-day business, as it will determine whether our activities can go ahead. My main priority is to get the business profitable again.”

Sukh Kaur has a different outlook. She started Matched – an online matchmaking company for Sikh & Hindu professionals – in September 2020, and feels excited about the prospect of 19 July. “Having created my company in lockdown, I am ready to meet people face to face and network. Matchmaking is a personal service,  so it's much more beneficial to meet face to face.”

How are startups preparing?

Freedom Day might not signal the end just yet. Concerns about potential future waves of the virus mean many employers are keen to continue with safety measures introduced as a result of the pandemic. Despite her optimism, Sukh also says that, “until I feel that the daily figures are decreasing and that there is no sign of a third wave, I will very much remain working locally.”

Due to their smaller workforces, SMEs in particular need to consider how lifting restrictions would impact employee health and safety, as well as staffing levels. Whether to keep measures in place depends on the resources and space available, as well as the impact of new and emerging concerns, such as vaccination uptake.

Cheryl Luzet is CEO of Wagada, a digital marketing agency. She has worked to operate as safely as possible through COVID-19, and will be continuing in the same way after Freedom Day: “We won’t lift full restrictions right away as the team is used to them, and they have become part of day-to-day life.”

“We have a lot of young people on our staff, and we are keen to see them all getting vaccinated for their own safety. With cases rising, we don’t envisage that we’ll significantly alter what we’re doing as a business until September time.”

Remote working presents another issue. It’s been recognised as a cheap option for small firms when compared to the cost of rent, with Hitachi Capital’s remote working survey estimating that SME businesses saved around £840 due to staff working from home during COVID-19.

But come 19 July, a return to the office might be the best way forward for startups. Lower-grade IT capabilities, for example, might be cause for concern. A report from Deloitte found that 25% of survey respondents had noticed an increase in fraudulent emails, phishing attempts, and spam to their corporate email since working from home. Added benefits around face-to-face working and more effective collaboration are another major pull factor.

> If you want to learn more, our return to work guide discusses the pros and cons of home, hybrid, or office working.

What about further delays?

On top of preparing for the full lifting of restrictions, companies are also contending with uncertainty over future postponements to Freedom Day.

UK Hospitality (UKH) has warned that another one-month pushback to lifting COVID-19 restrictions would cost the hospitality sector around £3 billion in sales. For a sector that employs 8.4% of the UK’s workforce, this could prove devastating for both cash flow and employment levels.

The likelihood of such a delay is unclear. The government has brought forward its target of offering all vaccinations to over-18s by two weeks, and appears fully dedicated to its new deadline. Boris Johnson has insisted on many occasions that the current scientific data means 19 July is an achievable target. But for employers, it could feel too much like a case of déjà vu to be taken seriously.

Michael Edwards is founder of The Northern Affinity, a partnership of SMEs and businesses based in the North of England. He tells us he's feeling “nervous and apprehensive” about the end of restrictions, and that among his small business partners, “confidence [Freedom Day] will happen is low.”

“The main impact of further delays will be the lack of confidence to plan, invest, and grow. We are ready to move forward and do much more to support and deliver a platform for northern-based businesses, but the confidence that the lifting of restrictions will bring will be the catalyst for this.”

What about government support?

Another factor which companies must consider in the run up to Freedom Day is government aid. During the past year and a half, the availability of business support packages has acted as a financial life jacket for the majority of small business owners.

Some of these financial help programmes have been altered or extended to help firms which are struggling, such as the Bounce Back Loan Scheme (BBLS), which we wrote about earlier this year. But the current concern is that many will end in-line with the previous deadline of 21 June, meaning some SMEs may struggle to stay afloat during the interim period.

Among the changes, the Small Business Rate Relief (SBRR) for eligible retail, hospitality, and leisure properties will be slashed from 100% to 66% on 1 July. On the same date, revisions to the Coronavirus Job Retention Scheme (CJRS) will see employees expected to begin contributing 10% of wages to furloughed employees.

Michael says that “the furlough scheme has been the lifeline many needed throughout the pandemic. In my opinion, the government should look to provide more guidance and support to help those businesses that want to grow and develop, which could also mean more roles are available to those who sadly are made redundant.”

The Federation of Small Business (FSB) is one of many groups currently lobbying for more business support measures. In a press release, the FSB’s national chair, Mike Cherry, said government schemes “have been critical to saving thousands of businesses and jobs. But we now must push for more, at a time when so many small firms need that helping hand to survive.”

How have small businesses reacted to Boris Johnson’s announcement?

Boris Johnson announced on Monday (5th July) that the lifting of all COVID restrictions will take place, as planned, on the 19th of July. For businesses across all sectors this means:

  • No limit on social contact
  • It is no longer a lawful requirement to wear masks indoors and in the office 
  • 1-metre plus social distancing rule will no longer be in place
  • The rule of six will no longer be a requirement in all hospitality venues
  • Table service is no longer mandatory in pubs, restaurants, and cafes
  • Nightclubs can fully reopen
  • Large-scale sports events, theatre shows, and music gigs can now all take place at full capacity
  • Capacity caps on businesses will be lifted
  • No limits on weddings and funerals 

The announcement has left small business owners across the UK divided in opinion about whether the lifting of all restrictions is the best option for their business and their employees. 

This is what some of them had to say regarding the announcement…

Those for the lifting of all restrictions on the 19th July

Paul Murphy, owner of professional locksmiths Keys 4 the City

“We are looking forward to the restrictions being lifted on July 19th. We are happier at the thought of people having the freedom and confidence to have service people like ourselves around. A lot of people have had to neglect work on their homes because of the restrictions and the worry of having people come into their homes.”

“As locksmiths, we are often called out at all kinds of hours and it will be nice for people to be comfortable in calling us if anything is needed in an emergency situation. The mask and social distancing protocols that we have introduced are going to still be a part of what we do if that is what the customer feels comfortable with.”

Edmund Glover, co-founder, and CEO at events and ticketing platform FIXR:

“We support the government’s long-awaited decision to lift restrictions from 19 July. Finally, the nightlife industry, especially nightclubs, will have parity with the rules and regulations of bars, restaurants, and other hospitality venues.”

“The nightlife industry has been uniquely impacted by the Covid-19 restrictions and this shift couldn’t come sooner. We expect a significant economic boost from Freedom Day onwards and we have already seen a surge in sales and event listings on our platform.”

“With all of that being said, we are not unsympathetic to those who want to keep social distancing measures and mask-wearing in place, especially the elderly and vulnerable. However, nightclubs offer a controlled environment with capacity limits where young people can enjoy themselves in a safe place.”

Carmen O’Neal, Managing Director of eco-distillery 58 Gin:

“I’m feeling optimistic about life beyond 19th July. As a supplier to the hospitality industry, we have seen the ongoing uncertainty and apprehension that has overshadowed business owners for well over a year. Hopefully, this will help these businesses now start to claw back losses and operate at a normal level and venue capacity. In turn, we are hoping this will lead to an increase in orders as the sector is able to plan ahead and be more confident in their short to mid-term sales.”

Those against the lifting of all restrictions on the 19th July: 

Jessica Morgan, CEO of PR Consultancy Carnsight Communications

“We’ve found a good way of working (during the pandemic) and, having also lost people close to us during this time, none of us feel completely comfortable pretending this is suddenly a normal situation.”

“Like many small businesses, we work in an office at least some of the time. We keep windows open and don’t wear masks in the office but we currently do in communal areas. With around 15 other people here regularly – and some clients also coming in – I don’t understand how we can suddenly not be asked to wear masks, not socially distance and still stay safe?”

“I don’t want to be forced to have difficult conversations with people who don’t want to wear masks. I’m worried some people will simply stay at home and not come into the office. It’s making the environment less equal for all.”

“Leaving it up to us rather than being guided by the science seems to be abdicating responsibility.”

Dax McLean, SEO Manager at Heatable boiler installers: 

“As an SME, we have some concerns regarding the lifting of restrictions, particularly when it comes to vulnerable employees, those that live with vulnerable family members, as well as those with limited available childcare.”

“The reality is that many employees remain incredibly anxious about coming back to work, so would it be right to compel them to do so?”

“The Health and Safety executive’s guidance on maintaining a safe office environment has not been updated since earlier this year and provides limited guidance. This could have the effect of creating a fractured approach between businesses, which could result in a breakdown of trust by both the public and employees. “

“Staff coming to work via public transport may also feel at risk if mask-wearing does not remain mandatory on public transport. So, for this reason, we believe mask-wearing should continue and be encouraged.”

“There are many other unanswered questions that also remain, like will the testing remain free for business? And what steps can we take if customers refuse to abide by safety procedures?”

“What we are asking for is more clarity from the government, so that we can all work together as SMEs to instill trust in the public and improve the chances of a safe and successful unlocking.”

Business advice from the SME Experts: 

Malcolm Tullett, founder of Risk and Safety Plus, a health and safety consultancy:

“I have over 25 years of experience providing health and safety advice for all types of organisations. The pandemic is one of the most unpredictable and serious risks we have seen, and the removal of lockdown restrictions will put businesses at a crossroads”

“I will be encouraging my own clients to heed the new rules and reduce social distancing and mask-wearing rules if they and their staff want to. I believe that common sense and individual choices are going to be key in how we mitigate risk from now on. However, if you feel more comfortable carrying on with the current level of protective measures, businesses shouldn’t have to alter what they’re doing, just as long as it remains a reasonable thing to do.”

“There is no one-size-fits-all approach to health and safety, especially at the moment where the risk outcomes are uncertain. Business owners and managers should allow workers to respond in the way they feel fit if it is a reasonable solution. If they want to keep plastic dividers up between workstations, then let them. If workers want to wear masks in the office, then let them do that as well.”

“The welfare of employees and others who might be affected should always be a business owner’s priority and working out the best way to preserve that in the absence of solid government guidance will require people to use their intuition instead. It might be difficult, but businesses owners should facilitate compromise and find a middle ground where most people have their concerns met.”

“So, if businesses believe there is little risk in getting rid of social distancing and masks, then they should have the freedom to act on their convictions. However, if they want to continue with protections in order to mitigate what they perceive to be a risk, then it is within their rights to do so. Individual common sense is going to rule the way moving forward.”

Phil Keoghan, CEO of digital services company, Ricoh UK :

“Since the start of the pandemic, teams work differently, business models might have changed, and ultimately, this means you need to move forward with your current situation in mind – not that of the workplace 18 months ago. Listening to employees is key to understanding their concerns about health and safety, wearing masks and their levels of comfort in the workplace as restrictions ease to ensure you retain your people.”

“Businesses must implement processes and technology that empowers people to work at their best, anywhere they are. Collaborative platforms and automated processes will be key to this, particularly in light of recent Ricoh research that highlighted that three out of five businesses feel they will need to return to the office, with two in five employees struggling to access company information they need from home.”

“Taking a tailored approach that empowers people to work flexibly – powered by the right technology and working practices – will ensure your workforce is productive, motivated, and safe as restrictions ease. Taking a people-first and conscious approach will help you build a strong, future-proof business that’s ready for a new era.”

Ben Ramsden, Head of SMEs at PayPal:

“Entrepreneurs have a duty of care to themselves to prepare mentally for the additional business responsibilities that accompany ‘Freedom Day’. However, they should not feel intimidated, as the strength and resilience they have shown throughout the pandemic will equip them well to successfully navigate the next phase of recovery.”

“Our Business of Change report has revealed that mental health and wellbeing will be a business priority for over a fifth of small businesses, with ‘Freedom Day’ presenting an opportunity for owners and decision-makers to make good on supporting both themselves and their workforce.”

“Now is the time for small business owners to look after their staff more than ever before, particularly as dedicated staff were found to offer vital support to 20% of SMEs since the start of the pandemic. Being flexible and respecting workers’ wellbeing needs to be a top priority in the coming weeks as this will provide the strongest reassurance to the workforce and prove that their investment in the company and its future during the pandemic was not misplaced.”

Conclusion

Undoubtedly, Freedom Day will help firms which have struggled under the weight of low staff levels and a reduced number of customers. Some industries are more excited than others, with hospitality particularly hard-hit as key government support schemes draw to a close, and more clarity over future delays needed to firm up preparations.

Despite the uncertainty, it’s heartening to know that the UK’s startups are looking ahead. As Freedom Day approaches, small businesses are positioning themselves for growth, eager to welcome in Phase 4 of the coronavirus lockdown on 19 July.

Helena is from Yorkshire and joined Startups in 2021 from a background in B2B communications. She has previously written for a popular fintech startup covering everything from money-saving tips to cultural reviews.

She is particularly interested in project management software and the films of Peter Jackson.

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