Threats to reputation seen as biggest SME concern
Despite Brexit having dominated the headlines for the past month, SMEs are more worried about damages to their reputations, new research has suggested.
Reputational damage was one of the key findings in a new report commissioned by Broker Network, which also highlighted other major concerns including red tape and employee issues.
The research, which polled more than 500 SME owners throughout the UK, found that reputation was the most commonly cited issue that was seen as a potential threat to businesses.
Almost a third (30%) of respondents saw threats to their reputation as their single biggest worry. The survey data was backed up by face to face interviews with business owners. Many said that reputation, once lost, was difficult to regain. It could also be impacted by factors outside their control, such as suppliers failing to deliver on time.
Perhaps surprisingly in an age when an online presence is so important to many businesses, the majority said that online reputation was not as important as traditional word of mouth.
Other issues seen as major worries included regulatory changes (cited by 24% of respondents) and employee issues (17%). Supply chain issues concerned 13% of respondents and legal issues were a worry for 11%.
Some issues, such as workplace pension auto-enrolment and the institution of the National Living Wage (NLW) could be seen to straddle both regulatory changes and employee issues.
Under the Pensions Act 2008, all employers are obliged to put qualifying staff aged between 22 and the State Pension age into a workplace pension scheme and contribute towards it. Workers can chose to opt out later but they must still be auto enrolled.
Firms who do not comply can be hit with a wide range of sanctions including charging interest on unpaid contributions, and an Escalating Penalty Notice of between £50 and £10,000 for every day the business remains non-compliant, depending on the number of employees affected.
Beyond that, fines can be issued of up to £5,000 per individual and £50,000 per organisation. These are penalties that could place severe strain on business finances or even push a firm towards insolvency. Those facing difficulties are encouraged to seek advice and to assess what alternative finance options may be available to them.
By Phil Smith