Despite a high in business confidence, small businesses could be leaving themselves vulnerable to severe weather.
While technological and workforce challenges top the concerns of SME businesses, firms are not taking risks from severe weather or flooding seriously enough and may be leaving themselves vulnerable.
According to the Zurich SME Risk Index, 78% of businesses surveyed said they were not overly or at all concerned by the risk of a major incident such as flooding or fire, despite recent weather events. Only 18% said unpredictable weather was one of the threats they were most concerned about.
Business confidence is at its highest level for 18 months, according to the index – which measures the perceived level of business risk faced by British small and medium business owners and decision-makers. The index fell from 42.61 points in Q3 to 41.68 in the fourth quarter.
Nearly half (48%) of small businesses believe the economy will improve over the next quarter, compared with 40% in the third quarter of 2013. But at the same time, concerns about technological vulnerabilities and workforce challenges have grown.
More than one in four – 27% – of the decision-makers surveyed said online marketed and trading offer one of the top three opportunities, almost two-fifths (39%) are worried about the vulnerabilities associated with technology.
And 36% cited local network failure as one of their biggest risks, followed by data loss (35%) and cyber attack (31%).
Meanwhile, workplace challenges, such as the availability of talent, is also a major concern (36%), with ageing workforce highlighted as a top risk by 10% of SMEs, up from 6% last year.
Zurich Insurance director of SME Richard Coleman said:
“It’s very encouraging to see that 41% of SMEs experienced growth in the last quarter, and that the vast majority have avoided emergency measures to cut costs and improve business performance.
“As we saw in Q3’s Risk Index survey, growth presents new, exciting opportunities for small businesses, particularly in areas like recruitment and web trading.
“While it’s important for business owners to avail themselves of these opportunities, it’s also important that they plan sufficiently ahead for the long-term risks on the horizon, such as the significant changes under way in technology and workforce structure.
“Traditional risks like severe weather should also not be overlooked. Only 3% of SMEs report that flood prevention measures are one of their three most serious operational risks.
“With flooding in recent months causing disruption to many businesses, it’s likely that many SME owners need to consider moving major incident risk management closer to the top of their priority list.
“Whilst these are insurable incidents, a focus on prevention, preparedness and mitigation is invaluable in the event of an incident, and ensuring a speedy return to business.”
Small business affected by enforced closures will welcome today’s announcement from the Supreme Court supporting their business interruption claims.
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