Keeping up with regulation and bureaucracy is what worries small businesses most, according to research by Zurich UK. And brokers believe that this is causing them extra stress. But fear of competition is growing fast
Over 60% of small businesses are drowning in red tape according to research from Zurich's UK commercial business.
Gordon Brown's recent Budget pledge to cut red tape has been broadly welcomed by small businesses. However, until businesses can see concrete changes to the amount of regulation and bureaucracy they have to deal with, it will probably remain one of their biggest concerns.
The results of a survey released exclusively to Insurance Times last week also showed that brokers fear that increased regulation, such as proposed twice-yearly employment legislation, was causing extra stress for them.
Zurich UK commercial business operations head David Smith said: "Small businesses rarely have the luxury of a dedicated resource to keep an eye on regulation and red tape.
"We are committed to helping small businesses address this and we believe the Chancellor's recent announcement will give them hope that more time can be freed up to concentrate on making their businesses successful."
Results from the insurer's small and medium sized enterprises (SME) index, which monitors confidence levels among SMEs quarterly, also reveal that 45% of small businesses are worried about the increasing numbers of new players in their sector.
Smith added: "Small businesses face fierce competition from new entrants into the marketplace. Our survey shows that concern about increasing competition from new players has risen from about 30% at the beginning of 2002 to well over 50% by the end of the year.
"Basically, if small businesses are to survive they need to be free to focus on their core business and reduce the amount of time spent on red tape and administration.
"Risk management and transfer can be a complex subject for many businesses to get to grips with, and it's vital that a business gets the right advice and cover to ensure peace of mind.
"We recommend that all businesses review their approach to buying insurance, and if they have any doubt about their exact needs, they should enlist the support of a broker, who can give specialist advice.
"An insurer who can provide both the appropriate cover and practical health and safety advice will also reduce time spent on non-core activities."
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