Understanding the impact of Covid-19 on community businesses

Amelia Byrne, Research Officer

Throughout the Covid-19 pandemic, we’ve heard anecdotally how community businesses have been responding to and coping with the changes brought on by the pandemic, however today we publish our initial analysis of survey responses on this topic. As the pandemic and subsequent lockdown took hold, we repurposed our annual study of community businesses, asking questions on the impact of Covid-19 on these organisations and their views about the future. We received just shy of 450 responses from community businesses throughout England which have informed this short report.

Initial shock

Like many other businesses, the operational capacity of community businesses was affected by the pandemic. Only 15% of businesses remained fully operational during the period – this group featured a lot of community shops, whose services were if anything more called for than ever. Half of businesses (50%) remained part-operational. One third (33%) closed but anticipate reopening when they can, and only 1% of businesses shut their doors for good – an indication of the resilience and determination of the organisations in this sector.

Like to other businesses, the workforce of community businesses was affected. Most (69%) took action to reduce staff costs which included nearly three in five (57%) furloughing staff and just over a quarter (16%) asking staff to reduce hours. We know that community businesses rely heavily on volunteers for the running of their organisations, so it is concerning to see that 57% also reported reduced volunteer numbers during this period. We can guess at the reasons behind this – the volunteer base in the UK is generally older and therefore more likely to be vulnerable to Covid. Our follow-on qualitative research will explore this in more detail.

Adapting quickly and drawing on support

While the majority of community businesses (65%) did experience a reduction in business activity, a quarter (25%) saw an increase – as above, this was primarily driven by shops. a much-needed community resource during the period. Almost all businesses who responded to our survey (89%) adapted or changed their business activities. They moved to offer their services remotely (46%), provided a new service to respond to need (24%), and delivered products to homes (17%).

Community businesses accessed support to help them to cope. Three quarters (76%) reported being supported by local authorities and councils, just under a third by central government (30%) as well as a quarter by other community businesses (25%). Most (79%) community businesses accessed some kind of financial support – the majority being grants.

Looking ahead

As is to be expected, three quarters (73%) of community businesses are not confident about their financial prospects following the pandemic. Despite this, hope remains strong with a third (33%) expecting to resume full operations after the pandemic and the majority (71%) anticipating that adaptations and changes will stay for the longer term.

We know how incredibly hard this period has been for the community business sector, but despite the challenges, this report demonstrates the passion of the people running these businesses and their absolute fight to continue operations. Community businesses really are at the heart of the community, and it’s wonderful to see communities coming together and keeping these businesses afloat.

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