The latest quarterly survey carried out by the insurance giant Zurich found that 16% of the British small and medium-sized businesses (SMEs) surveyed considered themselves at high risk of going out of business within the next year due to financial pressures.
Those perceiving themselves to be most at risk were SMEs in the Retail (21%), Construction (37%) and IT (24%) sectors. In all three the fear of going out of business had risen since the last Zurich quarterly survey.
However, it must be stressed that the survey is a record of the perceptions of SMEs.
More important, perhaps, is that almost 100% of them are not getting any help in dealing with their problems. Despite the latest government lending scheme, Funding for Lending, the banks continue to shun the SME sector as the Federation of Small Businesses (FSB) repeatedly highlights.
Just as important, is that most of them are not seeking help in dealing with their problems. Despite the perceived concerns of SMEs, they are not speaking to business advisers who remain quiet. Indeed insolvencies are at their lowest level for 30 years.
But again, perception plays a part but the insolvency statistics are a matter of fact.
Firstly there is the common view among SMEs that if they can’t see a solution then how can an “outsider”. Secondly, too often SMEs don’t know where to go for help and thirdly, they assume that it will cost them money they can’t afford to get help.
The danger is that the fear of going out of business then becomes a self-fulfilling prophecy, when with the help of a business doctor or turnaround advisor owners could save the business that has taken them years of hard work to build. Just a free consultation may be all that is needed, and most business doctors will provide some free support. It’s good business for all concerned.