Survey shows dip in size and risk level for small firms » SMEInsider

Survey shows dip in size and risk level for small firms

Despite a reduction in perceived risk for small businesses, many still report serious challenges as they face shrinking or going out of business altogether over the next year.

The Zurich SME risk index has fallen to 39.92 points in the third quarter of the year from 42.17 in the second quarter. The index measures the perceived level of business risk faced by SMEs, where the highest level of risk is 100, and zero no risk at all.

Despite the improvement, 21 per cent of SMEs say their business shrunk during the third quarter.

One third of SMEs said they face a medium to high risk of going out of business over the next 12 months from September.

Furthermore, 22 per cent are now worried about supply chain exposures, while 37 per cent are worried about workforce challenges such as availability of talent and capacity.

The survey found that 60 per cent of SME decision makers are not confident that the economic situation will improve within the next quarter, a significant 12 per cent increase over the past three months.

 “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,” said Zurich’s Richard Coleman. “However, it’s clear that the wider economic environment is a source of increasing concern for SME’s 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,” he added.