Diversification through new products or services, opening at weekends, trading for longer hours and targeting new customer groups were the most common actions taken by SMEs to weather the economic storm, compared to additional promotions and increased discounts (28%). Reducing staff pay, benefits and/or hours (18%), and reducing the number of permanent staff employed (10%) were other frequent actions taken by SME owners. Interestingly, only 2% of those polled declared that they had applied for one of the Government's business assistance programmes such as the Enterprise Finance Guarantee.
The survey also highlighted the fact that the recession is forcing some SMEs into taking unnecessary risks; enforced reductions in overheads are leading to cut-backs on crucial areas of business protection and operational security. Over one in 10 (12%) SMEs admitted that they don't have any commercial insurance in place. Given that employers liability insurance is required by law, there is a risk that some companies could be trading illegally. With an estimated 4.7 million SMEs in the UK, that means there could be around 560,000 businesses that are potentially at risk of being out of pocket should a disaster strike.
It is clear that cash is still king, with 69% of SMEs polled citing cash flow as their toughest business challenge in 2009 and 38% describing it as the aspect of their business that worried them most.
This concern is reflected across multiple business sectors. Of those polled, restaurants, pubs and companies trading in the leisure sector were the most concerned about money, with 75% citing cash flow as their primary area of concern. 70% of shops, salons and beauticians cited cash flow as their main challenge, while the Professional Services sector seemed least affected by financial worries.
One in five SMEs of those surveyed regularly works over 50 hours per week, equating to 104 hours or 4.3 days per year over the EU Working Directive's specified rules. Given this devotion, it's perhaps no surprise that SME owners rate determination and hard work as the character traits most commonly found in successful businessmen and women.
