Small businesses reveal their biggest worries of the year
Around a third of small businesses are concerned about sales and more than one in ten are worried about access to finance, according to a new survey. However, they are relatively relaxed about issues such as pension auto-enrolment, meeting the obligations of the National Living Wage and attracting and retaining skilled workers.
The study, by workplace pensions provider NOW:Pensions, quizzed businesses in the UK employing between five and 49 people. It found that by far the biggest concern of the year was sales, reported by just over a third (34%) of respondents.
Access to finance was the second biggest worry, cited by 12% of small businesses. A recent survey by Hitachi Capital UK found that 30% of SME owners had resorted to their own personal finances to prop up their businesses. Figures released by the Bank of England and the British Bankers Association (BBA) showed that net lending was up in 2015 but that the number of businesses applying for loans fell by 13% and the number applying for overdrafts fell by 9%.
The growth of alternative funding options could be one reason for this slowdown in applications. Data from Funding Options, the online aggregator for SME finance shows that SMEs have had £5.7m withdrawn a day in small business overdrafts, cutting the credit available to them by £8.4bn over the past four years. This could leave many reluctant to apply for funding via traditional routes.
The EU referendum was third in the NOW:Pensions poll but, perhaps surprisingly, it was listed as the top worry by just 7% of small business owners. Government spending cuts represented the top worry for the same amount of people (7%).
Being unable to keep up with technological advancements was cited by 6% of respondents and IT security was named as the top worry by just 4%. This is potentially worrying as numerous studies have shown that smaller businesses are increasingly at risk from cyber-threats.
Meeting auto-enrolment obligations was listed by 3% and the National Living Wage by 2% of respondents. The same proportion cited attracting and retaining staff and a lack of availability of skilled workers.
By Phil Smith