Zurich research highlights plight of UK SMEs
The UK economy may be showing signs of recovery but one in eight small firms have still faced closure in recent months, according to new research.
According to Zurich, a study of 500 small and medium sized enterprises discovered that 15% of them had been forced to cut staff numbers in order to continue operations.
Furthermore, one in four said they were forced into lowering prices in the last quarter in order to maintain a good level of sales.
The insurance firm said it was evidence that many SMEs are still “teetering on the brink” despite widespread reports of economic recovery.
“Our research demonstrates that while concern about risk amongst SMEs is falling, the risks themselves are still very much there,” said Zurich’s Richard Coleman.
The number of companies closing down has remained consistent across the past 12 months, suggesting that many businesses are still facing difficulties.
Facing up to the risks
Risks remain for many businesses, with company administration and other insolvency measures still very much a genuine concern.
Any businesses with concerns should seek insolvency advice at the first possible opportunity in order to limit the impacts on any potential processes.
Zurich suggests that the recovery is not affecting all firms equally, showcasing why individual companies will need to keep a watchful eye on their financial operations.
The figures follow recent reports that the UK economy has returned to pre-crisis levels following expansion of 0.8% in the second quarter of this year.
Office for National Statistics (ONS) figures show the economy is 0.2% larger than it was at its 2008 peak, but much of the growth is restricted to the service sector.
While it might take some time for other sectors to reach previous peaks, businesses in virtually every sector will have to proceed with caution.
The situation is not too dissimilar from recent months, but the state of the economy is a cause for optimism – even if success and positivity are by no means guaranteed.
By Phil Smith