Managing Your Cash Flow

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More than 1 in 10 companies on the brink of failure

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Although businesses said they were slightly less concerned about risk than in Q1, there are still signs that the recovery hasn’t filtered down to all areas of the economy.

One quarter of small firms has had to lower their prices because of the economic climate, and 39 per cent said domestic competition was one of the top threats to their business.

47 per cent are worried about maintaining good cash flow and 25 per cent are worried about debt levels.

Zurich’s SME director, Richard Coleman, said: “Our research demonstrates that while concern about risk amongst SMEs is falling, the risks themselves are still very much there.

“That the number of companies considering closing down because of the economic climate has remained consistent over the past twelve months, suggests that serious financial difficulties are still on the agenda for many.

“While it’s great to see that SMEs are feeling better about the risks their businesses face, the findings suggest to me that the recovery isn’t affecting all firms equally. It appears there remain at least two ‘tiers’ of SMEs, with a reasonable number still struggling as the recovery gains pace.”

Related: 10 risks your business needs to prepare for

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