A leading digital entrepreneur has accused the government of “abandoning” many smaller companies, adding that firms like his may have just a few months left if no further support is provided.
Gavin Sherratt, managing director of Liverpool-based software development consultancy Mashbo said current government support meaning employees can be ‘furloughed’ is no help for businesses like his.
That’s because furloughing means people are not allowed to work, severely hampering operations for small firms, while providing little help for employers themselves.
Speaking to BusinessLive, Gavin called for support for small business leaders, as well as greater clarity from the Government over the grants and funds available.
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He said: "We are the forgotten few. At Mashbo, we haven't got to the point where we have to furlough anybody yet, but it's coming closer and closer.
“We're part of the gap [between big employers and workers] - the ones that create the jobs, especially in Liverpool.”
Gavin was keen to stress, however, that it was important to see the bigger picture in terms of the coronavirus outbreak, and how his concerns are put into perspective when viewed alongside the rising daily numbers of 海角视频 deaths - and “brave, amazing” work of an increasingly-stretched NHS.
New rules introduced by the Chancellor last month mean companies can furlough their staff - where the government pays 80% of wages - but to do so means they are not actually allowed to do any work.
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Gavin also said furloughing himself would mean him being left with an income of "about £700 a month", and only able to carry out limited roles as a company director.
That would not include commercial activity, bringing major difficulties for any firm like his.
He said having been at the helm of a successful Liverpool firm for 13 years, people have said to him “you get to pay yourself in dividends, so you shouldn't get Government support'.
But he said: “We're paying tax in multiple different ways here as a business owner, and creating jobs.
"So when all of a sudden, you see that your staff have a support mechanism, and you don't, how do you keep the business going?
“How do you keep that motivation and that drive to say, ‘we can see where we might fall off a cliff if something doesn't happen, like generating new work, but we've got to keep going’.
"It's a unique, weird situation. Your team is looked after, but you're not. So when this has all passed, how will you have the energy to go back to the way it was, and create that energy and that drive to lead.”
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Gavin said it was even more of a pressing issue for Liverpool, an “SME city”.
He said: “We don't have big business here, everything is run by individuals who have taken risks and had ideas, and they are building things from creative and tech industries to professional services firms.
"But we are all being affected. I know someone who runs a recruitment consultancy, and his business has just stopped - because nobody's going to be hiring right now at the levels he was working at. The situation can make businesses feel lost and alone.”
He said as well as calling for more help from the government, it was important “to have that compassion too”.
He said: “There will be people who have had to let go of their team already, that have run out of cash. It's about where you get that balance. It's a strange, strange world.”
Mashbo employs seven people at present, but Gavin said he only expects the firm to have “two to three months” left of trading under current circumstances.
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He said Government payment breaks on VAT in tax meant a certain amount of money had been saved - but that at some point, even that would have to be used to pay staff.
“We have had four big projects we were about to start, just stop. We are trying to work out how to think differently, and how to have that ‘Kellogg's moment’ - how they kept on marketing during the Second World War.
“How do we get people in that mindset. If my team is furloughed, how do I tap into their minds and get that innovation?
“People that work at big companies can treat this as a bit of a holiday. Employees can be furloughed - they can go and clean their sheds. The big companies can absorb this, but with smaller companies, everyone you speak to says ‘at what point do I stop?’”
“Everything is compounding” for small firms like Mashbo, Gavin said, and he now wants the government to create a special team to help guide businesses through the crisis.
“The government should separate out how they communicate the various different messages of business support.
"There needs to be a single, clear message now - not chucked in with the death count and the struggles of the NHS.
“They must say ‘this minister is the sole point of communication’ - communicate and get that point across to the different cities and business groups.”
He said as a starting point, the Government should make a list of people and organisations it has not yet addressed but who they intend to help - including entrepreneurs.
Gavin added that he was aware of the “huge pressure on the government to support everybody”, but that he had support of up to 30 other similarly-sized businesses he had spoken to in recent days.
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“That would massively ease that tension.
“There's also no clarity of when things are happening, and businesses don't even know if they are eligible for some schemes.
“We are on the cusp of the small business grants being offered out now by the Government, but we are not 100% sure if we are going to get that £10,000 grant that would help us put another half a month on our life expectancy.
“People care most about the state of the nation. If we have got our channels we can go to, it would come across less like moaning, especially when people read facts such as that over 1,000,000 people are on Universal Credit. That's crazy.
“We need that focus so that those leading can lead, because if somebody's leading 10 people and positively affecting those 10 people, it's going to knock onto the next group of people that they speak to, which will hopefully in turn also encourage us to do business with each other.”
Despite the bleak outlook for small businesses, Gavin was clear that “health is obviously the most important thing”, and that it was vital employees are also given the mental health support they need to get through this period.
He said: “We can all start businesses again, post Covid-19, but if somebody gets ill, their life is affected forever.
“All of this is very concerning to businesses, but you've got to have that bigger picture of what's going on on the front line.
“All the doctors, nurses, care workers, shop staff - they are right in what we are doing now.
“You moan about your business, and then think 'hold on a minute, at least I'm not going into the firing line to risk my life every day’.
"So when you kind of start looking at the kind of things NHS staff are doing, the brave, admirable work, it puts it all into perspective a little bit.”