A new study has shown that most small businesses don’t last more than five years, prompting Axis for Business this week to ask one question; why?
Knowledge is Power for Business Owners
Through our role of providing energy and telecoms services to SME’s up and down the UK, Axis for Business has learned how important it is to business owners to ensure their companies survive in the long-term.
To do so, every small business owner needs to remember one thing; knowledge is power. If you know what it takes to develop a business that is successful long-term, you can ensure yours does so. That is why it is so important that a new study has shown that most SME’s don’t last more than five years.
Growth is the Biggest Barrier to Ensuring Long-Term SME Survival
As reported by Smallbusiness.co.uk, a new study from insurer RSA has shown that 55% of SME’s fail to survive past the five year mark. Construction companies were the most likely to fail, with survival rates measuring only 44%.
This correlates with other figures from the same study, which suggest that facilitating growth opportunities is a major problem for UK SME’s. When asked if it was difficult to grow their companies, 63% of leaders agreed. Meanwhile, the UK tax system was cited as the most effective hurdle of growth (44%). The absence of bank lending came next at (38%).
The UK Needs to Work to Rebuild Business Confidence
SME trading director at RSA, David Swigciski commented on the results, saying “the UK is a great place to start a business, but our research reveals that survival rates are low. The recession has had an unsteadying effect on SMEs and we need to work hard to rebuild their confidence.”
Swigciski went on to add, “The UK economy relies on a balance between start-ups and high-growth businesses, but our research reveals a worrying imbalance and there remain major barriers to achieving growth.”
How to Survive Beyond the Five Year Mark
Therefore, this new study shows what you as a small business can do to ensure its long-term growth prospects. You need to develop a growth strategy, to ensure that you can overcome the barriers to growth that currently exist in the country’s business climate. Only then, can you facilitate survival past the five mark.