UK SMEs lose out from adverse weather
One week on from Storm Doris and with temperatures plummeting again this week, new research suggests that the UK’s businesses are woefully unprepared for the impact of bad weather.
According to government research, 66% of SMEs reported a loss in revenue due to the direct implications of bad weather slowing down business, with over a third reporting damaged equipment and premises over the last five years. Interestingly, nearly half have no contingency efforts in place for managing this type of incident, which can have a huge impact on profit, among other traumas.
This lost revenue has been found to leak from the reduced workforce ability due to travel constraints, among other factors such as stutters in demand and supply chain problems. But it is important to acknowledge that the impact of sudden disruption can often cause long-term knock-on effects, such as large voided orders and missed opportunities. Therefore, a successful business will usually have a go-to plan available for serious unexpected occasions, or as much as they can anticipate.
By sector, the breakdown averages at 14.7 hours lost per year due to unforeseen adverse weather conditions, with construction topping the list at 20.8 hours, manufacturing and utilities just behind at 19.6 hours and transport losing out on around half a week per year.
With the UK SME market employing well over 15 million people at 5.5 million companies and pulling in a £1.8 trillion turnover, if not protected by insurance and a clear strategy to windbreak the adverse effects of bad weather, there’s a lot of time and resource to lose out on – £1.9 trillion to be precise. This figure includes unprotected property and assets left exposed to the elements by 69% (3.8 million) of uninsured SMEs, according to research.
Of course, some areas of the UK are more at risk than others, and this is reflected in the proportion of SMEs with lost revenue due to bad weather. Yorkshire and Scotland top the board, with both at 74%, which can be attributed to their geographic situation being more prone to suffer from snow, winds and flooding. By contrast, fewer SMEs reported a loss on revenue in Wales and South West England, but over half still reported some disruption to their business.
Regarding these results, Joe Thelwell from Towergate, has said: “The UK’s economy depends on small and medium sized businesses. But far too many firms have left themselves exposed to the unpredictable and at times damaging British weather. The majority of SMEs do not have appropriate contingency plans or insurance to protect them against lost business and unexpected bills resulting from the havoc our weather can wreak.
“With millions of people’s livelihoods depending on SMEs, it is crucial that these businesses take steps to better prepare for bad weather so they can get up and running as soon as possible. Practically, that could include backing-up computer systems and records, identifying contingency premises or taking out specific policies.”
Protecting your business against unexpected threat can ensure you stay on the right path towards growth and success. Factors such as bad weather and others including late payment or cyber-attacks are unexpected and can be costly. Ensuring you are one step ahead and expecting the unexpected can effectively mitigate the problems.
If you would like to know how to protect your business further, there are few additional points and how to overcome these explained in our post here.