57% of Small Businesses in the UK are at Risk of Closure in the Coming Year.

Small business Insurance experts at Towergate Insurance surveyed 750 Small Business owners from across the UK to explore the threats they are facing in the wake of the cost of living crisis and the impact these are having on their business.

The survey shows that 57% of small business owners feel their business is at risk of closure in the coming year as a result of current economic instability - but which sectors are most at risk? 

The Sectors Most at Risk of Closure 2023 

Small businesses in Human Resources are most at risk of closure in the coming year with 74.36% of SME owners in this sector feeling vulnerable to closure over 2023. The threats that businesses in HR are most vulnerable to include employee mental health, supply chain delays and changing consumer demands. 

Small business in Finance (27.07%) and Manufactures and Utilities (26.53%) follow amongst the sectors most at risk of closure this year respectively ranking second and third. SMEs in Finance are most vulnerable to property losses, whilst those in Manufacturing and Utilities are most at risk due to struggling to pay back loans. 

Where are Small Businesses Most at Risk of Closure?

Small businesses in Norwich are most at risk with 73.58% of small business owners stating they are at risk of closure in the coming year - 28% higher than the UK average.

Businesses in Manchester (67.21%), Sheffield (66.67%) and Brighton (62.96%) follow amongst those most at risk of closure, respectively ranking second, third and fourth. 

What are the main threats faced by small businesses in the Construction sector?

Inflation stands as the biggest threat to small businesses in the Construction sector with 36.36%  of small business owners citing these disruptions as their primary threat.

Supply chain delays (31.82%) and obtaining talent  (31.82%) follow amongst the main threats faced by small businesses in the Construction sector ranking joint second.

Alison Wild, Head of Marketing for Towergate’s SME insurance division, provides insights into how to approach protecting your small business: “Threats to your business manifest in a variety of ways and can take you by surprise. From liability losses to changing consumer demands, it can be hard to pinpoint and predict the biggest threats to your business. Taking time to identify and plan for probable risks over the coming year will further strengthen your business’ stability. As demonstrated in this study, supply chain delays, retaining uniqueness and changing consumer demands are the most prevalent threats affecting small businesses in the UK. Harnessing this information and exploring in more detail what affects your specific sector and region can help you identify the most probable threats and how to best adapt accordingly.”