UK small businesses contributed £18bn of support for local communities through the pandemic – despite 2020 being one of the toughest trading years on record

London, UK - 2 March 2021

Small and medium-sized businesses (SMBs) played a pivotal role in supporting communities through the coronavirus pandemic in 2020, contributing an estimated £18billion¹ through community initiatives such as volunteering or cash donations, according to the new SMB Mutuality Report from Intuit QuickBooks and Oxford Economics.

The analysis shows that on average in 2020, each SMB gave: nine hours per month in staff volunteering; £679 in cash donations and £372 in product or service donations.

And in turn, this was mirrored by an upswell in support and appreciation for SMBs from the general public, with 43% of consumers now more likely to shop at SMBs compared to before March 2020.

Digitisation was an essential part of maintaining both SMB’s relationship with communities and their ability to trade, with 73% of small and medium-sized businesses becoming more digital in 2020 – with a third (36%) of those who launched a new digital product or service last year saying they could not have continued to operate without it.

The report explores the relationship and shared value exchange between SMBs and their communities during the coronavirus pandemic. With the Chancellor poised to detail further support for SMBs in 2021 in the upcoming Budget, it shows how critical these businesses are to the UK, bringing value beyond just economic benefits.

SMBs supporting their communities despite challenging year

Despite the UK experiencing the biggest fall in economic output on record in 2020², and 22% of SMBs saying they are at significant risk of closure in 2021, they went above and beyond to support their local communities in 2020.

Nearly three in five (59%) undertook some form of charitable initiative: whether volunteering time; offering their business premise for free; giving discounts to NHS workers; or donating cash [see fig 1, sources³].

And half (51%) of SMBs focused their efforts towards their local community – demonstrating that SMBs are an essential foundation of communities across the UK.

Chris Evans, Vice President and UK Country Manager at Intuit QuickBooks said: “The fact that small businesses have made a substantial contribution to their local communities is so inspiring. It’s been a year like no other - they’ve faced unparalleled challenges like being forced to close, furlough staff and apply for loans to get cash flow. Most of all, they’ve had to pivot their business models and embrace digital technology to reach customers and protect their livelihoods.

It takes real resilience to move fast, change and pivot, but what’s amazing is this pivot has put digital at the heart of communities. Communities are more connected and this has created a circular effect where small businesses do more for their communities, while communities do more to support them in turn. This is an incredible outcome from a tough situation, and I hope our report will draw even more attention to the vital contribution SMBs make to our communities and inspire continued support.”

Consumer support for SMBs blooms

UK residents mirrored the increased community support from SMBs by becoming more supportive of local small businesses, including through their shopping habits.

Across the UK, 80% of adults said that local SMBs played a valuable role in their community in 2020, while nearly three in five (58%) said they appreciate SMBs in their community more than they did before the coronavirus pandemic.

And that community support is helping to boost SMBs optimism for their prospects in 2021. Some 39% of SMBs felt that local support for their business had increased during the coronavirus pandemic. Of these, 84% agreed that this had boosted their optimism for the future.

Mary Portas, Queen of the High Street and keynote speaker at QuickBooks Connect, said: “The High Street has faced a hugely tough year in the face of COVID-19. We’ve all woken up to the importance of small-to-medium size businesses in our lives and the role they play in our local communities. It’s crucial that they get the much needed support they need to be able to recover and flourish and I hope that we all now recognise our role and the importance of shopping and supporting local.

This report is encouraging for the future of our SMBs, who are such an integral part of the cultural and economic fabric of the UK.”

Digital played a key role in maintaining SMB community support in 2020

Digital was crucial in making SMB support for their community possible – and keeping these businesses trading.

Of the 73% of SMBs that became more digital, 74% reported becoming more digital as important to their ability to contribute to and support their local community and wider society, while 88% said this was important for their business to continue operating.

Overall, 22% of SMBs began offering digital products or services through existing platforms, such as Uber Eats or Amazon, while 13% launched their own digital product or service, such as an online store or click-and-collect. More than one in ten (14%) of businesses did both.

Chris Evans, continued: “We believe that the pandemic has pulled digital technology adoption forward by five years. With small businesses forced to rapidly adopt new ways of operating – such as ecommerce or simply building a website – it is creating a new digital high street and giving small businesses a host of new digital capabilities that will help them run and grow their business like never before.”

Sources

Methodology

A core part of our analysis is based on two new primary pieces of research conducted in January 2021.

First, Censuswide surveyed 1,000 decision makers at SMBs on their firm’s social giving and their switch towards digital products and services in response to the coronavirus pandemic.

The national survey results are weighted using business population estimates to accurately reflect the SMB population in the UK.

Second, Ipsos MORI conducted a survey on 2,100 adults across the UK, aged between 16 and 75 years old. Respondents were asked about their patronage of SMBs and how much they value SMBs in their community.

References

¹Figure based on primary research conducted with Censuswide where SMB decision makers were asked the value of their CSR activities. The figures are scaled to reflect the business population of SMBs of different sizes in the UK. To calculate the monetary value of volunteering hours, gross hourly pay of £17.57 was used. This is the mean gross hourly pay of all UK employees in 2020, reported in the ONS report ASHE (November 2020).

²https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpfirstquarterlyestimateuk/octobertodecember2020

³Share of SMBs that volunteered, did charitable work or coronavirus lockdown related activities or initiatives in 2020

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