UK SMEs optimistic about post-Brexit future

22/06/2017

SMEs will growThe DAS UK Group, which contains a specialist legal expenses insurer and law firm, has released the findings of its SME Market Barometer. With the issue of Brexit at the forefront of business owners’ minds as the government begins Brexit negotiations, the survey examined their attitudes and hopes post-Brexit and found that SMEs are confident about the potential growth of their businesses, with 55% expecting to grow and only 9% expecting to downsize over the next two to three years.

The research also found that every business surveyed has experienced at least one legal issue in the past 12 months. Unsurprisingly, legal matters were flagged as one of the top issues facing businesses today. In fact, large SMEs (those with 50-249 employees) faced on average at least 2 legal issues in the past year alone.

The top legal issues that businesses encountered include:

  • chasing payments from customers or debt from business partners (37% of businesses)
  • followed by tax issues (25%)
  • business contracts (24%)
  • pensions (15%)
  • health and safety issues (14%)
  • property related issues (4%).

The research shows that businesses that have a legal expenses insurance policy (LEI) place more importance on legal issues and businesses that do this tend to be more optimistic about growth. Also, while 3 out of 4 SMEs surveyed are aware of LEI, only 1 in 3 actually have a policy.

The DAS survey also revealed how UK SME’s bought their insurance, with 46% of those surveyed buying through a broker, 44% buying directly, 16% went through a price comparison website and 7% buying via a bank. (Research allowed SMEs to choose multiple answers.)

James Henderson, Managing Director Insurance – UK & Ireland, DAS UK Group said:

“It was interesting to note the level of business confidence amongst SMEs despite the economic uncertainties surrounding Brexit and what any deal will look like. With the seemingly every-present business risk of having to tackle legal issues, we hope that the peace of mind being given to our customers will enable SMEs to turn their optimistic outlooks to balance sheet reality.

“Our SME market barometer disproves the perceived wisdom that legal insurance only benefits large companies. With every SME surveyed reporting at least one legal challenge to their business in the last twelve months, the value legal expenses insurance could provide is evident. SMEs are a key part of our customer base and the insight provided by the barometer will helps us develop and expand our products to better meet their needs.”