THE bleak economic outlook has made more than one in 10 small businesses nationally - and one in six in the North - consider closing down in the past three months.
And the majority – 84% – say they are either fairly or very concerned about the current economic outlook, according to the first in a series of reports on the sector’s opinions. The SME Risk Index, organised by global insurer Zurich, also found that 84% of respondents were not confident that the economic situation will improve in the next quarter, and almost seven out of 10 were worried about the prospects for improvement in 2013.
Northern small firms were particularly concerned about their survival prospects. In the region, 17% said they had considered shutting up shop, compared to just 5% in the Midlands and 7% in London.
However, the sector is continuing to look for ways to work itself out of the double-dip recession, by reviewing business models and seeking new opportunities.
Top of the list was introducing business innovations, followed by cost reductions and exploring web-trading and online marketing. Almost six out of 10 have started to target potential new customers, while a third said they had diversified their businesses to offer more goods or services.
Richard Coleman, director of SME at Zurich, said: “It is clear that SMEs are feeling the strain of an uncertain economic environment.
“While it’s encouraging that SMEs are looking for new opportunities to ease the pressure, there are considerable risks associated with development and expansion, particularly when owners are using personal capital to fund such activity.
“This makes it vitally important that SMEs have a complete understanding of the risks present in such a fragile environment, and are fully capable of taking the appropriate steps to mitigate this risk.”
The SME Risk Survey, which was carried out by pollsters YouGov, also found the ongoing crisis in the eurozone is causing issues for the small business sector. Nearly half believe the problem is affecting UK consumer confidence and spending.
However, 22% said they were still looking to attract overseas buyers through online trading, joint ventures and overseas distribution partnerships.
Zurich said the SME Risk Index will now be carried out quarterly to track sentiment and outlook in the sector. It will concentrate on critical risks and developing challenges, including the economy, growth, funding, severe weather, technology and Government policy and regulation.
