Norwich Union research says that one in six small business owners experience a level of stress that causes sleepless nights.
According to the survey, 750,000 people are affected by sleeplessness, with 46% identifying the market downturn as the biggest contributor to their worries. Concerns over customers defaulting on payments amounts to 30% of business owners’ stress, and 23% of those surveyed said rising utility bills are causing financial stress. This is a marked difference to the Hiscox 2007 Risk Barometre results last year, which ranked utility costs out of the top three areas of concern.
The anxieties of the SME business owner are affecting their insurance purchasing behaviour, giving at least this sector a dynamic edge in the scope of insurance provision. Figures from Norwich Union showed that 45% of business owners and managers have taken out additional business protection policies covering the salary life or life of a key employee. This figure is 7% higher than those who have personal life insurance, and 15% higher than those with health or dental policies. 61% of those surveyed have cover for premises or equipment.
Director of protection at Norwich Union, Trevor Bailey said: “The recent growth in demand for business protection is impressive, but the potential is extraordinary: the market for life cover alone is estimated to be in excess of £500bn. But confusion reigns with nearly 75% of those surveyed admitting to a lack of understanding about business protection cover and products.”
According to the insurance company, Hiscox, business taxation was the biggest worry for SMEs in 2007. The study revealed that four out of five SMEs were concerned about the burden of increasing taxes. Underwriting manager at Hiscox, John Heaney said: “The cost of running a business has increased, reflected in rising local business rates and the increasing compliance cost of tax regulations.”
With pressure to improve sales ranked second in the worries of business owners, the shifting fortunes of the wider economy is impacting on business owners’ priorities. The continuing problem of chasing for late payments means some SMEs are spending less time on development projects, which undermines their long-term potential. According to Bacs the average amount owed to an SME at any one time is £30,000, with 29 % of those companies surveyed stating they’re risk of collapse is set at £20,000 worth of overdue invoices. Even as late payments stagger cash flow, most SMEs are determined to pursue expansion plans, demonstrating that sleepless nights will not hinder their ambition.
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1 Comment
It is not suprosing that businesses have taken out more insurance recently. These businesses are the ones who realize that getting through a recession is hard enough without the risk of losing a key employee. There is a lack of understanding in this market but hopefully the internet should help with this.