Research carried out by Aviva has revealed that one in ten small firms are concerned about closing this year unless there are improvements in trading conditions.
The survey, which took in the views of 500 small firms, found that only 13% of businesses felt positive that the economy will improve, whereas 28% felt that there was a risk of the recession hitting again.
David Bruce, commercial product manager at Aviva, commented: “Confidence among small and medium-sized enterprises is as low as it has been since the onset of the recession and many feel they are in real danger of losing their businesses should the economy fail to improve this year.”
The findings come as no surprise to the Forum of Private Business, who believe that the bad feeling is not helped by the current lack of adequate and accessible funding for small businesses. It was recently revealed that the banks involved in the Government’s ‘Project Merlin’ have missed key lending targets. However, there is a feeling that the current economy also opens opportunities for business owners to expand into niche markets, while the many redundancies have created a strong pool of job seekers from which to recruit.
The research carried out by the insurer also revealed that to keep business thriving 17% of firms were using sales and discounts whilst another 17% had resorted to permanent price reductions. Meanwhile other respondents were looking to make changes to their internal structure with 14% of business owners looking to cut staff pay or privileges, and 9% considering reducing their permanent staff.
Although the Government has made numerous pledges to help small businesses including the Red Tape Challenge and the New Enterprise Allowance, the schemes have so far failed to stir an entrepreneurial uprising, and Culture Minister Ed Vaizey recently told startups owners “Don’t rely on the Government.”
Photo by Gwydion M Williams – CC
