smallbusiness.co.uk: Helping your business think big

Email a Friend

Businesses now spending more time on business strategy and risk management
Businesses are strategising more in today's professional scene

The past five years of economic stagnation and volatility have forced UK businesses to significantly adapt their attitude and approach to risk, research finds. 

Small and medium-sized enterprises (SMEs) have undertaken the biggest risk-management behaviour shift in a generation, with 53 per cent spending more time on their business strategy and risk management than they did before the financial crisis, according to a study by Zurich.

Some 35 per cent are doing more long-term financial planning, and 33 per cent are scrutinising their business continuity plans more frequently.

However, by doing so, SMEs have adopted a notable conservatism that raises elements of uncertainty about the long-term strength and growth prospects of the UK’s SME economy. 

The past five years have put a squeeze on SMEs and many do not have ample cash or resources, nor enough awareness of the full longer-term costs they will face, in order to tackle on-going stagnation or volatility.

Zurich director of SME Richard Coleman says that while it is good to see the increased sophistication and long-term view of many SMEs, the SME economy needs to regain its appetite for controlled, calculated risk-taking, with many reluctant to do so.

'This vicious circle is likely to play out until either the context for risk-taking decreases for UK SMEs, or the wider economy starts to show signs of rebounding. 

'SMEs are essential to the UK business and economic environment, so ensuring that a balance exists between risk-taking and risk prevention represents a significant economic and policy challenge today.'

The research also finds that confidence and performance have defined a twin track of 'winners and losers' in the UK’s SME economy. 

The 59 per cent of respondents who are confident about their business outlook have demonstrated a dramatically higher level of performance than the less confident respondents.

For example, the most confident of those surveyed have achieved admirable growth in turnover in the past two years. Two in five (39 per cent) report growth and only 13 per cent report shrinking turnover, but almost a half (47 per cent) of the less confident report shrinking turnover and just 9 per cent achieved some growth, the polar opposite trend.

See also: Effective risk management

Related topics: Entrepreneurs

Previous article

Why small businesses should be mindful of timing when sending marketing emails

Next article

Small companies not preparing sufficiently for financial year-end

Post a comment

Related

News | Management

e-Business Week plans to enhance small businesses' fortunes

News | Law

Free risk assessment for your business

News | Opportunities

It’s time to update your credit management practices

News | Management

Reassess your business risk

Small Business Offers

  • Making a connection

    A free small business guide to communication technology, brought to you by Vonage and SmallBusiness.co.uk.

  • Want to process payments on your website?

    Accept credit cards online via our secure, stable and easy gateway. Sign up now for summer savings – no setup fee, no monthly fees until September.

  • The smarter way to get cash flowing

    Running a business can be challenging so it’s important to ensure that you choose a funding solution that keeps you firmly in control while providing the flexibility to grow.

More from Small Business

Starting a Business
Tricks for making small businesses look mighty

Tricks for making small businesses look mighty

Here, Henry Lewington presents some advice on how your modest-sized company can punch above its...  

Financing a Business
Why HMRC checks are manageable for your small business

Why HMRC checks are manageable for your small business

Neil Tipping explains the process of HMRC Business Records Checks and what demands are made...  

Running a Business
Advice for those considering buying a B&B

Advice for those considering buying a B&B

Here, Gareth Smyth looks at the key things to weigh up before purchasing a bed...  

Blog
Public source data and Scottish independence

Public source data and Scottish independence

The uncertainty surrounding Scottish independence leaves a question mark hanging over the future of public...