As smaller businesses grow towards becoming medium-sized, their risks grow too. Brokers can provide added value through sound risk management advice

The UK’s small business community has stayed active during economic hard times, with new company registrations up by 4.8% during 2009-11. Targeting these SMEs as they transition from small to medium-sized is one strategy open to brokers offering risk management advice.

“It’s very difficult to move from employing 10 people to 20 because there’s a time when the owner-manager has to do everything. They’re an accountant, HR manager, health and safety person, and it all gets too much,” says Federation of Small Businesses spokesman Andrew Cave.

Complex and ever-changing employment law is one of the key areas where SME owners are crying out for professional advice. “Last year, there were changes to the rules around flexible working and parental leave, the agency worker directive, and the abolition of the default retirement age,” Cave says.

“In isolation, one of those changes is not that difficult for an owner-manager to deal with, but it’s all changing at the same time.”

But while legislation can act as a brake to development for those lacking support, growth is sometimes spurred by a downturn. Cave says: “When larger businesses go bust, gaps open in the market for new ideas and fresh thinking. Some of the most successful businesses in this country were formed during downturns.”

“More generally, over the last 10 to 15 years it’s clear that the UK is moving away from being a country with a strong manufacturing base, which was traditionally dominated by big business, to the service sector, predominantly made up of smaller enterprises.”