Small Business Survival Rates Reach 10 Year Low
Majority of small businesses fail to survive over five years with 55% stating it has never been more difficult to grow in the UK
New research has declared 55% of small and mid-sized businesses are failing to reach the five year mark; with 68% finding it difficult to grow their business due to bank lending, tax breaks and business rates barriers.
The research, released by insurance broker RSA, revealed that despite an overall improvement in the economy, business survival rates have decreased since 2004 with the construction industry performing the worst (survival rate of 44%) followed by the health sector (56%).
The report, titled Growing Pains, also looked at business growth potential and identified the leading barriers to it. 61% of small and medium-sized firms lack confidence in their business’ capacity to grow after three years and 69% state that it is very difficult to grow a small company into a medium-sized one.
Furthermore, 55% of small businesses remarked that it has never been as difficult to grow a company in the UK as it is now with the tax system cited as the biggest barrier (44%), followed by a lack of bank finance (38%), red tape issues (36%), the cost of running a business (36%) and late payments or cashflow problem (35%).
RSA’s small business trading director, David Swigciski, commented on the research, calling to the government to do more to improve the landscape for small and mid-sized businesses:
“The UK economy relies on a balance between start-ups and high-growth businesses, but our research reveals a worrying imbalance and there remain major barriers to achieving growth.
“Now is the time for the government to understand what’s really holding small businesses back and to ensure that they are coming up with the right incentives to drive growth and give businesses confidence.”