Irish small businesses have a positive outlook for the rest of year

Trading conditions have improved among 70pc of Irish small businesses, according to new research from accounting software player Sage.

More than half (52pc) of small Irish businesses have a positive outlook for the next six months, according to new research from Sage Ireland.

The research found that many businesses (52pc) are currently experiencing greater impacts of the pandemic due to decreasing consumer demand (22pc); the length of the crisis (16pc); and finance issues (15pc), but that the majority of businesses have a positive outlook for the next six months with more than half of small businesses (52pc) believing that trade activities will revert to normal, and 70pc already reporting improved trading conditions.

“For every €10 spent locally, €40 is created in local employment and with Irish shoppers actively supporting local businesses, it’s crucial that businesses do what they can to leverage this support to sustain their businesses and maintain their cash flow over the next number of months”

The findings of the research into the impacts of Covid-19 on Irish SMEs were discussed today (7 July) at Sage Sessions, a virtual event attended by 500 of local businesses, at which Susan Hayes Culleton, the Positive Economist, and Margaret O’Rourke Doherty, chair of ISME took part in key note discussions with Barry Murphy, managing director of Sage Ireland.

Business sentiment

“The pandemic has impacted most SMEs across the country but it’s important we understand that different industries have been affected to different degrees so of course, the sentiment among small businesses ranges from negative to hopeful,” said O’Rourke Doherty. “What is very encouraging to see is the proportion of businesses who are experiencing improved trading conditions. 

“I believe as long as conditions do not deteriorate, the outlook for the next 12 months is relatively positive for Irish SMEs although for some sectors more than others. What is universal however, is the current consumer sentiment. For every €10 spent locally, €40 is created in local employment and with Irish shoppers actively supporting local businesses, it’s crucial that businesses do what they can to leverage this support to sustain their businesses and maintain their cash flow over the next number of months.”

The research indicated that the majority of businesses (86pc) have changed the way they operate in order to continue to reach customers and tap into this widespread consumer support for local businesses.

An overwhelming number of Irish small businesses (93pc) have turned to online tools and resources in some capacity, including making their products and services available online (27pc); accelerating digital transformation (27pc); and introducing online sales or e-commerce platforms (21pc).

“It’s been encouraging to see such a significant number of small businesses gather virtually to discuss the future of their businesses and to share their experiences of the pandemic, said Barry Murphy from Sage.

“From our interactions with customers over the last 16 months, we understand the varying degrees of challenges experienced by businesses, from having to remain closed, to managing cash flow and staffing. What remains clear from this research and from discussions at Sage Sessions today, is that while there is a positive outlook among many businesses, there is a proportion still experiencing severe effects of the pandemic.

“I hope that if businesses take anything away from today’s event, it’s the impact small changes can make and how adapting to new ways of operating can help them survive now, leverage consumer sentiment and ultimately grow their business in the future.”

By John Kennedy (john.kennedy3@boi.com)

Published: 7 July 2021