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How SMEs May Handle Future Lockdowns Differently

Read our insights into how businesses are becoming better at handling lockdown challenges, and what this means for the future.
How SMEs May Handle Future Lockdowns Differently

Updated on 17/12/2020

With each national lockdown and each iteration of local, tiered lockdowns that small businesses go through, they become a little more familiar with adapting to and coping with change. The nature of that change varies widely; the first national lockdown back in March had a real ‘shock factor’ associated with it, while subsequent lockdowns since have posed a different set of economic and practical challenges to businesses (e.g. social distancing measures).

Some industries have suffered massively, such as hospitality, while others seem to be slowly getting back on their feet - but one thing that’s clear is that there’s been a real need amongst SMEs to constantly adapt and evolve in 2020. What does that evolution entail, though? And are businesses becoming better at dealing with lockdowns?

In this article, we’re going to compare SME attitudes between different lockdowns, look at some of the main ways in which SMEs are responding differently to new lockdowns, and suggest some ideas for how you could adapt your lockdown approach if your current one could do with a bit of a refresh.

How did Lockdown 1.0 impact SME attitudes towards Lockdown 2.0?


England’s first national lockdown began on the 16th March, and research conducted by Virgin Money in September showed that two thirds of SMEs said their profits were lower in April because of Covid-19 disruptions with over 600,000 claiming their business would be likely to close.

This could potentially be, in part, due to the immediacy with which lockdown impacted businesses; hitting hard at a variety of different levels and affecting everything from cash flow shortages to the ability to retain staff.

The picture painted by the statistics around Lockdown 1.0 is fairly bleak, with many businesses struggling, some collapsing and an uncertainty hanging over SMEs. Was this still the case, then, moving into lockdown 2.0?

How do SME owners feel they need to alter their business’ lockdown approach?


Moving into the second national lockdown, Business Leader reported a more positive sentiment amongst the SME community. Around 49% of small business owners in the study from Paragon Bank felt that learnings from the pandemic would ‘help their business become more resilient going forward’.

Perhaps the level of familiarity SMEs have built up with the typical lockdown format means that they’re better equipped to understand how a lockdown will impact their business, and to react in an appropriate manner. Having that reference point of what a national lockdown entails, then, could be fuelling a more positive sentiment amongst businesses.

Alternatively, the infrastructure that less digital-oriented businesses have had to acquire and implement as a direct result of the first lockdown could be a contributing factor to SME positivity. Many companies had to source IT equipment, software, and upskill their staff to use new technologies in a short period of time, so having overcome this hurdle could mean that subsequent lockdowns prove easier to deal with for these companies in general.

How about business owners specifically, though? How can they prepare for future lockdowns?

What can business owners personally do to prepare for future lockdowns?

Link have revealed that around 75% of SME business leaders feel they need to run their businesses differently in light of the pandemic challenges. When pressed on exactly how this could play out, 66% of respondents identified that their leadership now requires a greater amount of bravery.

That’s an interesting finding, as it highlights that business leadership itself may be a more desirable and depended-upon quality amidst new lockdown challenges. As a business owner, you may want to invest time into personal growth and developing your own leadership abilities in order to effectively cope with new lockdowns, alongside the more obvious practical steps that need to be taken.

How will businesses handle future lockdowns?


The lockdown experiences businesses have had so far will hopefully yield some valuable insights for business leaders, who may be able to turn that into actionable ways to better cope with future lockdowns. Hindsight is a wonderful thing, and by evaluating the mistakes that have been made as well as the pivots that have proved successful, businesses should be able to position themselves better moving forward.

Here’s how businesses could approach future lockdowns:

From a customer perspective


One of the key ways in which businesses could improve their lockdown approach in future is by managing customer expectations in a realistic way, with clear communication. For example, if you’re operating a delivery service and in the first lockdown you kept your ‘estimated delivery dates’ within the pre-coronavirus range, now is the time to re-evaluate that decision and give your customers a more realistic expectation.

This is especially important with seasonal events taking place, such as Christmas or Valentine’s day - on which people are likely to be pre-ordering gifts. What’s more, a big learning from the initial lockdowns could be the sheer value that can be added to a business through clear customer communications.

When customers are more reluctant to spend, competition increases, and so holding onto a customer base and garnering support by giving them clear communication throughout the process could make the difference between you edging out over your competition and maintaining healthy revenues or potentially losing out on opportunities.

From a stakeholder perspective


Alongside operational changes, relationships between businesses and their respective clients, suppliers or partners have had to evolve to adapt to working-from-home circumstances. The new norms of communication that companies have established should make the transition into new lockdowns significantly easier.

Planning for the future under the current circumstances will inevitably prove difficult, however many businesses are likely to agree that opening conversations early with these key partners could yield small advantages that make coping with new lockdown challenges that little bit easier.

All things considered, it’s likely that while the challenges brought about by previous coronavirus lockdowns may have wounded or even ended some business activity, the majority of businesses that have survived are likely to handle future coronavirus lockdowns better with the benefit of experience and hindsight.

Some of the key pressure points to be aware of as you plan for the future include the end of CBILS and BBLS schemes, the extension of furlough, and a potential vaccine affecting national lockdown guidance.



This has been prepared by Esme Loans Limited for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.

Esme Loans Limited makes no representation, warranty, undertaking or assurance (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided.

Esme Loans Limited accepts no liability for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

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