THE Head of Enterprise in Donegal has said that hundreds of small companies and sole traders across the county are at risk of closing due the coronavirus pandemic.
Mr Michael Tunney was speaking as it was confirmed that the number of confirmed coronavirus cases in the Donegal continues to rise despite the county moving to Level 3 restrictions last week. There was 28 confirmed cases of Covid-19 reported in Donegal last evening.
The Covid-19 pandemic is proving to be the toughest challenge that many businesses across the county have ever met. Cash flow has dried up and financial problems continue to deepen with many forced to shut down last weekend for the second time in six months.
Almost 700 companies applied for the Business Continuity Voucher (worth up to €2,500) in Donegal earlier this year to develop short-term and long-term strategies to respond to the Covid-19 pandemic.
“It was the Government’s first response to enable businesses to address the Covid-19 challenge and just under 700 applications were received in Donegal. Looking at the kind of businesses, their turnover and the challenges facing them I felt at the time that forty per cent of them may not be around next year. Unfortunately, my views haven’t changed and, if anything, the number will be higher,” Mr Tunney said.
The scheme is open to sole traders and companies across every business sector locally that employ up to 50 people and was designed to help business owners make informed decisions about what immediate measures and actions should be taken to protect staff and sales.
“A lot of them are sole traders or employ two or three people. They’re been treating business as a vocation rather than a business. That’s fine up to a point but when you’ve lost up to fifty per cent in sales over the past six months it’s very hard to sustain those losses and survive,” Mr Tunney said.
“At the moment, it’s not about profit. It’s simply about trying to survive and with no time frame on when things might improve that’s extremely difficult,” he added.
The Head of Enterprise said that a number of traditional retail stores could also be headed for trouble.
“There’s huge challenges. There’s uncertainty and a lack of consumer confidence and it could take a couple of years before that returns. The tap has been effectively turned off and it’s only being slowly turned back on. By the time it’s flowing once again a lot of shopping habits will have changed,” he warned.
“More people are working from home which means that there’s less footfall in our towns and villages at lunch-time while there’s not as many workers about to go out for a meal or drink on a Friday evening. How do businesses make up the slack?” he asked.
“This whole uncertainty around shut downs is crushing for business owners and staff alike,” he said.
Mr Tunney also pointed to Brexit and its economic impact on Donegal.
“I can see where the Government is going with these current support structures but I think it’s only putting a sticking plaster on things.
“The added value manufacturing and IT sectors are doing okay at present but what happens come Brexit?
“Those businesses selling into Northern Ireland and the UK or whose raw materials are from or go through the UK are going to be hit. There are some extremely difficult times ahead for hundreds of businesses across Donegal and, sadly, many of them will not survive,” he said.