Small firms see fall in demand as biggest problem
But VAT increases ranked as ‘not a problem’ by many
Downturn in demand as the biggest issue currently facing Britain’s small businesses, according to a new survey from debt recovery solicitor Lovetts.
The snap poll of Lovett’s customers revealed that 63% of respondents ranked a fall in demand as ‘important or very important’ and just 9% saw it as ‘not a problem’.
Other major issues identified in the survey included economic uncertainty, described as a major issue by 58% of businesses, and competition on pricing, which 56% of respondents identified it as an important stumbling block.
Perhaps because of the fact that they do not create a competitive disadvantage, financial issues did not appear to be forefront in the minds of respondents, with just 17% ranking VAT and tax increases as a major issue and 36% seeing no issue at all. Similarly, inflation was only identified by a tenth of firms as a large problem.
Charles Wilson, chairman and managing director at Lovetts, said the major concerns raised in the report represent “a troubling trio of issues.
“Downturn in demand is the biggest fear for businesses right now and it’s not surprising. Customers are hard won, and prices are being driven down which means margins are being squeezed. In essence, many businesses are running to stand still.
“It’s at times such as this that keeping a focus on cashflow is paramount to help cope with the uncertainty in the market and put the business on firm footing if demand does fall.”