Business Risk Levels Low but Two-Thirds of Businesses Still Concerned about Revenue and Future Profitably
Regulatory challenges still causing business headaches, with employment regulation biggest challenge for small and medium firms
Business risk levels are at a two year low, down from 43.16 to 39.50 points, yet 62% of small and mid-sized firms are concerned over revenue streams and 58% are worried about profitability, according to insurance company Zurich’s 2015 risk index.
The research unveiled participants’ confidence in the economy’s future growth has increased (up from 34% to 49%), coinciding with the Office of National Statistics’ (ONS) figures which revealed that 2014’s economy witnessed the fastest pace growth since 2007 at 2.6%.
However, while more companies now attribute a strong economy to a firm’s performance, with 22% naming the economic environment as a top opportunity for business compared to 15% the year before, the majority of companies remain anxious about their business’ future.
Employment regulations are still causing issues. The report highlighted the top challenges for small and mid-sized businesses, with employment regulation coming out highest at 27%; followed by tax (23%), health and safety (22%) and pension red tape (20%).
Overall business concerns were down however, with less worried about market dynamics (from 46% to 35%), supply chain exposers (33% to 25%) and more companies confident in their ability to access finance with concern over the state of lending down from 42% to 29%.
Head of small and medium enterprises at Zurich, Jason Eatock, commented on the report:
“Reviewing the Risk Index over the past two years, it’s a delight to report that small and medium firm concern about business risk is now at its lowest level since the Index began. Confidence in the economic environment, and its capacity to improve further, has dramatically improved since two years ago.
“However, while the situation is improving overall, it’s clear that regulation is still a major headache for small and medium businesses which may not have the man power to keep on top of the raft of new legislation.”