How should international risk influence UK SMEs?
Companies of all sizes can be affected by market shifts across the globe according to a new study, but just how aware do smaller firms need to be of potential risks?
Commercial insurer RSA has suggested that all businesses should keep a watchful eye on what is happening across international markets.
The reasoning is relatively straight forward too – a startling proportion of British SMEs face a degree of overseas risks, be it directly or indirectly.
For instance, industry giant Tata Steel has just cut 12,000 UK jobs following a drop in industry prices – caused predominantly by the influence of Far Eastern companies on the market.
This highlights that actions overseas could have an impact closer to home, although the study revealed a number of other risks as well.
Many were linked to technology – 72% of SMEs in the survey had a business while around half of firms use online banking, leaving seven in ten firms fearing cyber-attacks.
Around three quarters also had security and fraud concerns, both of which can take place at an international scale.
A quarter of UK SMEs already have international customers while a similar number purchase from overseas; a fifth also travel internationally for business.
Essentially this increases the risk involved while uncertainty relating to a potential yes-no vote on EU membership has also caused concerns among businesses.
More than half of firms are already seeking government advice relating to the impacts of a possible European exit, even though a vote on the subject may not take place for several years.
Considering the financial consequences is essential too, as firms that fail to plan for any change could be left in difficulty.
Those unsure of their position should look for guidance and advice – insolvency practitioners in UK cities can provide this if required.
They should be able to outline the financial solutions that are available while also giving suggestions of what could be considered in the future.
Although SMEs might believe they are too small to be influenced by activity on the other side of the world, it is better to be prepared.
By Phil Smith
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