Some 30 per cent of small and medium-sized enterprises (SMEs) see threats to their reputation as the biggest issue on the business concerns list, while 24 per cent cite regulatory changes and 17 per cent say that employee issues are a high risk.
The lowest concerns include supply chain issues (13 per cent) and legal issues (11 per cent), according to a survey of 500 SMEs by Broker Network.
Business owners say that reputation, once lost, can be impossible to regain and, moreover, it can be affected by things outside of their control, such as a supplier failing to deliver on time.
Surprisingly, many say that online reputation is less of a worry than traditional word of mouth. The data is reinforced by face-to-face interviews with SME owners.
A challenge for labour costs
Since George Osbourne announced the introduction of the National Living Wage, with a starting rate of £7.20 an hour for those aged 25 and over, many business owners have protested and expressed concern over their ability to afford the increase in labour costs. According to CBI Deputy director general Josh Hardie, small businesses will be hit the hardest.
He says that companies are committed to raising prosperity and living standards, but for wage increases to be sustainable they must go hand-in-hand with productivity growth.
‘If the National Living Wage (NLW) doesn’t get this balance right it will risk being unaffordable for many firms. Smaller businesses and those in key sectors like hospitality, retail and care are likely to be particularly affected,’ he adds.
Despite the key findings of reputational and business risk identified by the survey respondents, 35 per cent admit they have no insurance in place to protect them, with further 11 per cent disclosing that they do not know if they are covered.
Andy Fairchild, CEO at Broker Network says, ‘The findings will allow our members, all SMEs themselves, to engage with and build stronger relationships with their customers by understanding them and their risks and concerns.’