23% of SMEs at risk of folding within a month if they lost a key employee – Scottish Widows
Nearly half (45%) of SME owners had never sought advice about business protection, while 94% said their business relied on more than one key individual.
Nearly a quarter (23%) of small and medium-sized enterprises (SMEs) would only be able to keep trading for up to one month if they lost a key employee, Scottish Widows’ report found.
Data found one in 10 firms would stop trading straight away if the owner was unable to work due to illness.
Nearly half (45%) of SME owners had never sought advice about business protection, while 94% said their business relied on more than one key individual.
Catherine Trimble (pictured), head of distribution, protection at Scottish Widows, said: “Business protection is often seen as specialist or unknown territory.
“In reality, the opportunity is much closer to home. Advisers are already having the conversations that lead to business protection.
“Clients talk about debt, succession, reliance on key individuals, pressure on cashflow and uncertainty about what would happen if something changed unexpectedly.”
Trimble added: “The need is there. It simply does not arrive labelled as business protection.
“At the same time, most small businesses remain under-protected.
“Many rely on a small number of people to generate income, service debt, and drive growth.”
She said: “Yet a significant proportion have never taken advice, do not fully understand their options, or have no funded plan in place.
“To help raise awareness of the potential risks businesses may be carrying and how business protection can help mitigate them, Scottish Widows has published a new report for financial advisers highlighting the key issues from an advice perspective and a separate guide for business owners about how and where their own business may be exposed.
“Our research suggests many business owners may not fully understand where they’re exposed or what support is available.”
She added: “That’s why we’ve developed this guide – to help business owners recognise potential risks and give advisers a practical starting point for conversations that can otherwise be difficult to begin.
“Wealth planners, workplace specialists and individual protection advisers don’t need every technical answer from the outset.
“The important first step is helping their business clients identify where vulnerabilities exist and then exploring the options available to strengthen their business resilience.”
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