Diversifying in business is the way to survive

Diversification through new products or services, opening at weekends, trading for longer hours and targeting new customer groups were the most common actions taken by SMEs to weather the economic storm, compared to additional promotions and increased discounts (28%). Reducing staff pay, benefits and/or hours (18%), and reducing the number of permanent staff employed (10%) were other frequent actions taken by SME owners. Interestingly, only two per cent of those polled declared that they had applied for one of the Government’s business assistance programmes such as the Enterprise Finance Guarantee.
The survey, carried out for Aviva, also highlighted the fact that the recession is forcing some SMEs into taking unnecessary risks; enforced reductions in overheads are leading to cut-backs on crucial areas of business protection and operational security. Over one in 10 (12%) SMEs admitted that they don’t have any commercial insurance in place. Given that employers liability insurance is required by law, there is a risk that some companies could be trading illegally. With an estimated 4.7 million SMEs in the UK², that means there could be around 560,000 businesses that are potentially at risk of being out of pocket should a disaster strike3.
David Bruce, commercial product manager at Aviva, comments: “Britain’s small business community remains entrepreneurial, creative and opportunist at heart, with an innate ability to be both flexible and versatile. The ability to anticipate and adapt to the changing environment is key for any successful business, and business owners are clearly leading the way in this regard.”