The cost of business disruption is presenting a serious concern to SMEs in the UK, a new study has found. Among the key findings of the Direct Line for Business survey is the news that the average cost incurred by a business forced to suspend trading for two weeks is £8,775. Other key findings include:
- One in ten small businesses have suffered disruption that severely impacted their enterprise in the last two years
- One in five small businesses would last less than a month in the event of being forced to halt trading
As well as this, there are some key effects caused by business interruption. Reduction in profit (48%), reduction in revenue (42%), loss of customers (39%) and putting personal money into the business (32%) were found to be the most common impacts of an interruption in trading on small business owners.
‘A lot of unforeseen issues’
Nick Breton, head of Direct Line for Business, said: “There are many reasons a business might need to halt trading and unfortunately a lot of them are unforeseen.
“Keeping a business afloat when there is a disruption can be stressful enough, especially when there are no funds being generated.
“Business owners must ensure they have adequate insurance to minimise any disruption should an incident occur. Business interruption insurance covers your business if your insured property has been damaged resulting in a loss of income.”