Overall concern regarding SME business risk at its lowest levels yet
6th November 2014 | News
Overall concern regarding business risk has fallen to its lowest levels since Zurich’s ‘SME Risk Index’ began in 2012 – down from 42.17 points in July 2014 to 39.92 points this month.
SME owners have a duty to monitor their business risk as it would be dangerous not to prepare for the worst, especially in an economic climate that is still recovering post-recession.
However, the Index found that a little over one-in-five (21 per cent) small and medium-sized enterprises (SMEs) in the UK have shrunk in the last quarter, despite the improving economy.
The survey also found that 60 per cent of SME decision makers are not confident that the national economy will improve within the next quarter – a 12 per cent increase in the last three months.
More alarmingly, 34 per cent of SMEs also say they face a medium-to-high risk of going out of business in the next 12 months.
Almost a quarter (22 per cent) of SMEs surveyed are now worried about supply chain exposures, while 37 per cent remain concerned about workforce challenges such as the availability of the right talent and employee capacity.
Richard Coleman, director of SME at Zurich, said: “It’s great to report again that SMEs are continuing to feel better about the risks their businesses face, reflecting wider signs of growth in the UK economy.
“However, it’s clear that the wider economic environment is a source of increasing concern for SMEs even as their concerns over some of the more specific risks reduce.
“With one third of SME decision makers still saying they could face going out of business within the next year, it’s clear that financial difficulties are again a key worry for Britain’s small and medium businesses.”