Business risk in the UK is at its lowest level in the last four years, according to a new report by insurance company Zurich, even though 53 per cent of small businesses in the country said they were concerned because of the economic climate in the country. The Zurich ME Risk Index is showing 36.72 points – a nine per cent decrease in the last six months. The report was first issued in Q3 2012, and it was at its highest at Q1 2013, at 44.55.
Out of 1,000 SME owners that were surveyed for the report, 45 per cent says it’s riskier to run a business now than it was 12 months ago, but only seven per cent were considering closing shop – the lowest percentage ever recorded.
“This may be because SMEs are feeling some relief in key areas other than economic concern, which are contributing to the success of their business,” the company said.
Half a year ago, red tape and challenges surrounding the workforce were the biggest issues, but now – they’re the greatest fallers. Less than a third (32 per cent) now has workforce challenges, and less than a third (30 per cent) also sees red tape as a roadblock – down from 39 per cent six months ago. And obviously – the positive effects are showing. A quarter fewer SMEs have had to reduce prices in the last financial quarter, and more than a quarter less have had to make staff cuts, compared to six months ago. Twice as many SMEs have said their business grew.
“Small business has been through the mill over the past four years, due to a changeable business environment of fluctuating political and economic concern,” says Anne Griffiths, Head of SME Proposition at Zurich.
“There appears to be light at the end of the tunnel for small businesses, though. Workforce challenges and concerns over business risk are at a four-year low and businesses are growing at twice the rate they are shrinking in the UK. The SME community has long been the economic heartbeat of the United Kingdom, and while fixing the economy remains the highest priority, the wider picture is one of success, prosperity, and most importantly, optimism.”