SMEs count the cost of hidden crime

Smaller enterprises are less likely than their larger counterparts to report a crime because of the increased business costs that it involves, according to a survey just published.

The British Chambers of Commerce’s Business Crime Survey 2001 has revealed that a quarter of self-employed business people specifically cite increased insurance costs, in the form of higher premiums, as the main reason for not reporting crime.

A fifth of firms that employ four or fewer people do not report incidents at all. Of this group, nearly an eighth said that the main reason they fail to report crime is the fear of reprisal. The survey found that larger businesses experienced and reported proportionately more criminal incidents.

Some of the most common types of crime businesses face are vandalism, burglary, damage to a vehicle or theft by an employee.

The Forum of Private Businesses’ Jim Redman remarked that large firms can train people to prevent crime by defusing aggression in customers, for instance. Small companies have neither the specialist knowledge nor the resources to do the in-house training.

Redman said his members may find the crime “cheaper and quicker to deal with themselves,” rather than report it. He continued that individual businesses have to “weigh up” whether it’s worth the cost of increased insurance premiums if they report incidents.

David Lennan, director general of the BCC, said that smaller enterprises are particularly vulnerable to the consequences of business crime. “For small businesses with few resources, crime can tip the balance from success to failure.”

Eight out of ten survey respondents reckon that video camera surveillance is the most effective method of reducing crime. Firms with under five staff are more likely than larger businesses to view simple business and shop ‘watches’ as an effective crime reducing measure.

The costs of increased security can be prohibitive for a small business. The report pointed out some less costly ways to improve matters:

Seek advice on how to reduce crime from the police and other local bodies. Half of the firms surveyed with fewer than five employees have never received such information.

Investigate community safety partnerships. Only 15 per cent of businesses with under five staff were aware of this statutory scheme set up in 1998 forcing “every local authority and police force in England and Wales to establish a local partnership to reduce crime”. These are responsible for establishing local priorities for reducing crime, and are a mechanism through which to express concerns about crime and disorder issues.

For a copy of the report, visit www.britishchambers.org.uk.

With thanks to Lloyds TSB Success4Business.

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