Partner Article

SMEs consider closure in difficult economic climate

Over 10% of all UK SMEs have considered closing their doors for good in the face of the current economic climate, according to global insurer Zurich.

84% of SME decision makers are concerned about the UK’s current economic climate, of which 38% are very concerned. A further 84% are not confident that the economic situation will improve over the next quarter, while two thirds are nervous about the economic picture in 2013.

In the North, 17% of all SMEs have considered closure, in comparison with 12% in the South, indicating the economy divides present across the country.

Richard Coleman, Director of SME, Zurich, commented: “It is clear that SMEs are feeling the strain of an uncertain economic environment. Our research shows their confidence has been hit and they are concerned about the future.

“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.”

Despite the gloomy outlook, many businesses are still looking for new opportunities. A third are looking at business innovation opportunities, 30% are attempting to make cuts to expenses and 22% exploring web-trading and online marketing.

He continued: “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 and minimise the impact of external pressures.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .