Zurich’s latest SME Risk Index has hit its highest level in two years, the insurer reported this week.
The index is now sitting at 40.18 points, indicating the highest level of risk to the UK’s small businesses since Q1 2014 and a 5 per cent increase in the last six months.
The survey is made up 1,000 SME owners, and it also reveals that 39 per cent of owners believe their business faces more risk now than compared with a year ago, with 8 per cent saying they have considered closing down.
Anne Griffiths, Head of SME Proposition at Zurich, comments: “Figures from the last half of the year show a worrying increase in concern about business risk among SMEs. 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 SME 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 businesses’ place as the powerhouse of the British economy, but they will need all the support available for them to ride out the current uncertainty.”
Some positive signs
However, it’s not all doom and gloom: the Index does point out that the lower confidence levels have driven a growing number of SMEs to look into more innovative ways of surviving and growing.
According to Zurich, nearly half of SMEs (48 per cent) say they have increased and broadened their business development efforts in order to attract new business; meanwhile 30 per cent of those responding to the survey say they have pursued diversification as a way of bucking slow growth rates.