Too Few SMEs Have Plans in Place to Cope With Identified Risks

Many small businesses are unprepared for the impact that disruptions from cybercrime, staff losses and severe weather can have on their day to day running.

According to new research by the Federation of Small Business (FSB), looking at how larger businesses and government departments can better support small businesses in their supply chains, only 35% of small businesses and the self-employed reported having plans in place to cope with potential disruption risks to their own business operations or their supply chain’s.

The most prevalent risks identified to small firms were:

  • customers who failed to pay for services or goods (51%)
  • the loss of key members of staff (37%)
  • IT problems (29%)
  • the impact of cybercrime (17%)
  • severe weather (13%)
  • and even the dangers of terrorism (1%).

Smaller businesses are the most vulnerable to such risks due to their size and lack of resources.

The FSB is calling on companies in supply chains to help smaller businesses, with fewer resources, providing assistance with forward planning.

They are also calling on the government and Local Authorities to emphasise the need for smaller firms to have continuity plans in place as a routine measure.

FSB National Chairman, Mike Cherry, said: “Small businesses face a number of threats on a regular basis and it is vital they are prepared to deal with them. By implementing continuity plans, small firms can prepare for many of the sudden changes that can impact on them directly and their supply chains.

“One key step towards ensuring a business is prepared for any supply chain difficulties is continuity planning. This includes identifying the most significant risks to a business’ commercial operations and creating a plan to mitigate those risks should any of them materialise.

“The costs that businesses face when their supply chains are impacted can be severe and therefore it is crucial that we stress the importance of planning for the future.”

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