One in ten British small and medium-sized businesses (SMEs) has considered closing down in the last three months as a possible impact of the current economic situation, new research claims.
Global insurer Zurich, which carried out the study to mark the launch of its SME Risk Index, said that 84% of SME decision makers remain “fairly/very concerned about the UK’s current economic climate”, with a similar percentage not expecting to see any sort of improvement for the next quarter at least.
Zurich said that 17% of SMEs in the North have considered closing down, compared with just 5% in the Midlands, 7% in London and 12% in the South overall.
“It is clear that SMEs are feeling the strain of an uncertain economic environment,” said Richard Coleman, director of SME at Zurich. “Our research shows their confidence has been hit and they are concerned about the future.”
He added: “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.”
When asked which three things they currently see as the biggest opportunity for their organisation, business innovation came out top (33%), followed by cost and expense reduction (30%) and exploring web-trading and online marketing (22%).
Furthermore, in the last three months over half (58%) of the SMEs surveyed said they have expanded activity to target new customers and one-third (33%) have diversified their business offering.