One in Ten Small Businesses Fear Closure This Year
Almost a tenth of small-business owners are concerned about going under this year if trading conditions don’t improve, research by Aviva has found.
The survey of 500 company owners by the insurer found that 9% admitted they could go out of business if trading conditions did not pick up.
Just 13% of respondents had high hopes of the economy improving, whilst 28% felt there was a genuine risk of a double-dip recession.
“It’s evident that the tough trading conditions we saw last year have continued into 2011.”
said David Bruce, commercial product manager at Aviva.
“Confidence among small and medium-sized enterprises is as low as it has been since the onset of the recession and many feel they are in real danger of losing their businesses should the economy fail to improve this year.”
Phil McCabe, senior policy advisor at the Forum of Private Business, said the findings were to be expected.
“Entrepreneurs are a generally optimistic group, but there is no denying how difficult trading conditions are right now.”
McCabe added that there was a lack of adequate and accessible funding for both start-up and existing enterprises.
However, he said that the current economic situation also presented opportunities for business owners.
“There is the chance to diversify into niche markets, which remain strong, and redundancies create a strong pool of staff from which to recruit.”
The Aviva research also highlighted that, after diversification, most business owners were looking to sales and discounts (17%) and permanent price reductions (17%) to keep their business’ healthy, with 14% looking to cut staff pay or privileges, and 9% considering reducing permanent staff.