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Downturn in demand biggest issue for SMEs

Aug 02 2011

Two thirds of businesses are concerned about a downturn in demand

The biggest issue businesses face today is a downturn in demand, experienced by nearly two thirds of firms, a survey finds.

‘Economic uncertainty’ (58 per cent) and ‘Competition on pricing’ (56 per cent) are the next biggest worries cited in a study of 100 business owners by commercial debt recovery law firm Lovetts.

In contrast, currency exchange pressures and increases in VAT and tax/national insurance score highly as ‘not a problem’.

Lovetts chairman Charles Wilson says, ‘Downturn in demand is the biggest fear for businesses right now and it’s not surprising. Customers are hard won and prices are being driven down which means margins are being squeezed. In essence, many businesses are running to stand still.

‘It’s at times such as this that keeping a focus on cash flow is paramount to help cope with the uncertainty in the market and put the business on firm footing if demand does fall.’

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