According to new research from Direct Line for Business (DL4B), one in five SMEs in the UK has been encouraged to expand following the government's decision to introduce an Employment Allowance of £2,000 a year towards employer National Insurance (NI) contributions.
In addition to those small businesses looking to grow, a further 33% of firms are considering recruiting due to the reduced cost of employment.
However, despite these encouraging plans, small companies are not prioritising business protection, with only 40% believing they have necessary insurance cover in place for expansion. Business owners prioritise the importance of setting targets (68%) and the need for a comprehensive business and marketing plan (66%). Unfortunately, many seem less prepared when it comes to ensuring their business is protected if things go wrong or their cover is aligned to the expansion of their business.
Jazz Gakhal, head of DL4B, said: “It is encouraging to see that so many UK businesses are looking to expand. The government’s decision to reduce the financial burden for small companies is a welcome boost for owners and managers across the country. Given SMEs account for over 99% of all private sector businesses in the UK, the health of this sector is vitally important.
“However, it’s concerning that a majority of these businesses aren’t adequately protected for liability or loss, which could spell disaster for them should the worst happen. Taking on staff is a big responsibility and as a business expands it’s easy to neglect some business processes as SME owner-managers are pulled in a myriad of different directions. Ensuring that businesses maintain adequate insurance cover is as vital as ensuring that the marketing plan is up to scratch. Protecting yourself against fire, theft, loss of earnings and compensation claims could mean the difference between healthy business growth and a business having to fold.”