SMEs concerned about economy

Small and medium-sized enterprises (SMEs) are worried about the state of the economy and reports have suggested that some have even considered shutting up shop.

The latest Zurich SME Risk Index revealed that 11 per cent of firms in the UK have considered closing down in the last three months due to the impact of the current economic situation. A further 84 per cent are concerned about the country's climate, with 38 per cent stating that they are very concerned.

A number of administrations could start to filter through to the market if businesses don't take a closer look at their working practices as a further 84 per cent of those questioned stated that they are not confident that the economic situation will improve in the next quarter.

But it appears that businesses are still looking for expansion possibilities, with 22 per cent looking at exploring the online market, and 58 per cent expanding activity to target new customers in the last three months.

Richard Coleman, director of SME at Zurich, commented: "While it's encouraging that SMEs are looking for new opportunities to ease the pressure, there are considerable risks associated with development and expansion, particularly when owners are using personal capital to fund such activity.

"This makes it vitally important that SMEs have a complete understanding of the risks present in such a fragile environment, and are fully capable of taking the appropriate steps to mitigate this risk and minimise the impact of external pressures."