25% of SMEs feel that they will go bust within the next 5 years, claims Xero, the accounting software platform.
Xero performed a study of 500 business owners as part of its ‘Business Rewired’ report, which looks at the future of small businesses. It found that 40% are at the moment enduring the most difficult period they have ever faced as an SME owner.
Stemming from the deep rooted fear from uncertainty around Brexit, the government and consistent financial troubles, other concerns such as late payments (54% of the businesses polled feared this), cyber-attacks (27% of the businesses polled feared this) and tax rates have left UK business owners scared for the future.
Other contributing factors included the cost of recruitment, maintaining or increasing levels of productivity, rising cost of rent, staff retention, the increasing cost of importing goods and materials, running a green or sustainable company and finally uncertainty over Brexit (44% of the businesses polled feared this).
And just as importantly but sometimes very much forgotten outside of the more mainstream corporate private and public sector businesses, is that running a modern small business impacts mental health and by more than 30% of small business owners, according to the research carried out by Xero.
Small business owners work an average extra 9 hours each week on-top of their normal working hours. And as a consequence of working for themselves and answering to nobody, on average, they have invested just under £12,000 of their own money into their business to keep it running. Over 25% of small businesses feel that their own business is causing them a personal loss.
“The ways small businesses work now are dramatically different from the 1980s when the first personal computers arrived. But business needs to adapt to greater changes coming their way. New technologies will hasten a far greater consciousness towards the biggest killer of small businesses. Cash flow problems will decline as instant payment technologies take root as a cultural norm. I believe what we’ll see is 30-day payment terms going the way of the fax machine.”, Gary Turner, co-founder of Xero
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