Small firms accused of ignoring risks

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The Independent Online

Small and medium-sized firms are putting the economy and jobs at risk by failing to plan for disruptions to business, research out later this week will show.

The report, commissioned by insurer Axa, says SMEs account for 99 per cent of all British firms and employ 12.6 million people. Yet in the face of mounting threats to business, which range from staff illness and this week's threatened petrol blockade to terrorist attacks, few have put contingency plans in place.

"Despite growing awareness of the problem, UK SMEs appear to have failed to be stimulated into action," notes the report, called Out of Business As Usual? "This is of particular concern as SMEs constitute more than half of the UK's private sector turnover and employment.

"With fewer resources to withstand the business impact of a major incident than larger firms, under-prepared SMEs expose a significant vulnerability in terms of their own survival and the consequential impact on their employees, their customers and their suppliers."

The report interviewed senior owner-managers in firms ranging in size from 20 to 200 employees. From this it concluded that two of the biggest obstacles are lack of resources and an assumption that the business will survive any interruption.

Douglas Barnett, risk control strategy manager at Axa, said the lack of planning could have a "huge" impact on the wider economy but, contrary to popular belief, it was simple to address. "You don't need to bring consultants in. It could be something really simple, like sitting round a table. The finance director may know the financial impact, but does he know what's happening in the warehouse or shop floor?

"Too often, businesses say 'no one is helping us, we can't afford it'. Yes, there's responsibility in government, but others have responsibility too. They have got to take this more seriously."