UK’s ‘one-man band’ businesses not cushioned against crisis
500,000 of the UK’s small businesses admit their current resources would not even support them for a month
With 4.2 million of the UK’s 5.5 million businesses run entirely by one person, research from AXA has found that 44% of UK firms would be forced to close and lose income in the event of illness, accident or an unforeseen crisis.
Just 31% of business owners admitted their business could continue to operate if they were ill but only thanks to the efforts of family members such as a partner or children. Just 5% said they would rely on their parents to step in and help them run their business.
Only 28% said they could afford professional help if they were unable to run their business, while on average they could only afford to keep their business afloat for three months on current funds. One in 10 – equating to half a million business owners – have less than a month’s worth of capital.
Using a personal credit card was cited as the first port of call for financial support (30%), followed by family and friends (25%) and business banking services for just 22%.
Darrell Sansom, managing director of AXA Business Insurance, commented:
“We have a fantastic tradition of family at the heart of business here in the UK. Many entrepreneurs start out with a baby on their knee at the computer, or credit their earliest successes to the help and support of their partners and loved ones.
“But in an advanced economy like ours, businesses should also have a range of financial tools to call upon when they face unexpected illnesses, accidents, setbacks and shocks.”