In 2018, we reported that most SME owners were not prepared for the risk of disruption to their business.
A study from the Federation of Small Businesses (FSB) claims showed that almost two-thirds (65%) of small businesses and the self-employed had no plans to cope with threats to their business operations or supply chains.
At the time, the biggest potential risk, according to 51% of small business owners, was customers who fail to pay for services or goods.
Second to this was the impact of losing key members of staff, with 37% of firms identifying this risk.
The research highlighted other common risks to business operations, including:
- cybercrime (17%)
- transport problems (15%)
- severe weather (13%).
Mike Cherry, chairman of the FSB, recommended that businesses should implement continuity plans to assess and mitigate these threats.
Cherry said:
“The costs businesses face when their supply chains are impacted can be severe and therefore we stress the importance of planning for the future.
“Given the likelihood that an enterprise will encounter some sort of business interruption issue more than once in their life, it is key that firms are encouraged to consider all risks they could face.”
Unfortunately, this lack of preparation meant that when the coronavirus pandemic hit, many small businesses were negatively impacted and some may never recover financially.
Despite the government’s best efforts to support SMEs with the Coronavirus Job Retention Scheme, over 3 million self-employed workers have missed out on the support package due to being ruled ineligible or as a result of banks closing their doors to new customers.
This has meant that small businesses have had to put heavy investing towards enabling remote working, including new equipment such as laptops and computer programs.
On top of this, 40% of businesses have provided staff with digital training to help them work from home in the most efficient and productive ways.
Whilst some small businesses may not recover from the financial strain of the pandemic, for many, this has been a wake up call that will encourage them to be more prepared in the future and will also enable staff to work more flexible now they have the correct setup to work from home.
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