Increased small company failures on the horizon

Nearly one in ten small- and medium-sized enterprises fear that they could go out of business within the next few months if trading conditions do not get better, according to a new report. The news represents increasing opportunities for business buyers to snap up distressed business deals.

The latest publication of the SME Pulse report, compiled every six months by insurance firm Aviva, showed that nine per cent of the businesses surveyed could realistically fail in the next six months.

Confidence among business owners was found to be lower than ever: just 13 per cent of the business owners said that they thought the British economic landscape was going to improve in 2011. That figure was a fall of five per cent from the figure in the last report.

Aviva's commercial product manager, David Bruce, said that the trading conditions had carried over from similar uncertainty seen last year.

"Confidence among SMEs 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," he warned.

He added that businesses would maintain their current tactics for the immediate future - including further discounting, increased diversification and reducing in staff numbers - and hope to weather the economy.

Click here for distressed business opportunities.