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 | Law

Free risk assessment for your business

News | Opportunities

Its time to update your credit management practices

News | Management

Reassess your business risk

Guide | Accounts & tax

Tax for part-time businesses

Small Business Offers

More from Small Business

Starting a Business
The actual statistics of small business success

The actual statistics of small business success

Here, we look at what common success rate stats mean and how they should be...  

Financing a Business
Why small business lending alternatives are the next big thing 

Why small business lending alternatives are the next big thing 

Here are a few of the biggest drivers behind the slowdown in small business lending...  

Running a Business
How to re-energise a disengaged employee

How to re-energise a disengaged employee

Here, we look at what employers can do to turn around employee disinterest before it...  

Blog
Small businesses and courtesy in the digital age 

Small businesses and courtesy in the digital age 

In the latest in his series of courtesy in business, David Cliff examines the downside...