Small Business Risk at its Highest For Two Years
One in 10 UK business owners have considered closing their business already this year
The risk levels of the UK’s small businesses are at their highest for two years with more than half (56%) of small firms voicing concerns over the current economic climate, Zurich has reported.
The survey of over 1,000 small business owners found that almost two in five (39%) believe their business faces more risk now than compared with 12 months ago, with nearly one in 10 (8%) having considered closing down their business in the first few months of 2016.
Red tape and workforce related issues were cited as the main areas of concern for business owners with 44% having noted that the skills shortage is holding them back. 39% also said that the weight of regulation and compliance is a stumbling block.
This increase in risk levels has had a knock-on effect with 19% of small businesses having reduced their prices, 13% making staff redundant, and 8% having reduced wages.
Despite the negative trend, 48% of small enterprises are targeting new customers with 30% diversifying their offering.
Anne Griffiths, head of small business proposition at Zurich, said:
“Figures from the last half of the year show a worrying increase in concern about business risk among small businesses. There continue to be a number of economic roadblocks and operational challenges to be overcome.
“While a number of firms are forced to make difficult decisions, more small businesses are working harder to reach new audiences and exploring innovative methods to diversify their offering than are cutting costs or staff. In front of a precarious economic backdrop, the small business community are demonstrating the flexibility to adapt and capitalise on their environment.
“What we are seeing now is the strength of character that has cemented small business’ place as the powerhouse of the British economy, but they will need all the support available for them to ride out the current uncertainty.”