5 biggest challenges facing SMEs right now, and how brokers can support them
At a Glance
2024 and beyond offers unique challenges for a wide range of industriesGlobal issues have a local impact for small and medium sized businessesOffer solutions to help you win the trust of new and old clients
There’s never been an easy time to run a business. But with the cost-of-living crisis, emerging technologies and disrupted supply chains, 2024, could be one of the most challenging years for your clients yet. Here, we take a closer look at the challenges facing businesses and what brokers can do to support them.
AI, international conflicts, and an unpredictable economy could make 2024 a difficult year for SMEs. Luckily, NIG has plenty of ways to help brokers as they support their clients navigating the challenges ahead.
Challenge 1: Economic uncertainty
According to a recent survey of small businesses, the UK economy is the largest perceived barrier to growth in the next 12 months. More than three-fifths (62%) of business leaders cited domestic finances as their biggest challenge at the end of last year.
How we can help
Our Business Interruption Cost Calculator on Risk Assist helps to ensure SMEs have cover for the correct sums-insured and indemnity period for business interruption insurance. By using the tool and minimising the risk of under-insurance you can give your clients the best possible chance of recovering from business interruption.
Challenge 2: Waning customer demand
Three in ten (31%) small businesses believe consumer demand poses a threat to their success throughout 2024. It’s the second most cited challenge to business growth over this year and should come as no surprise given the cost-of-living crisis.
How we can help
Our Risk Assist Business Continuity Plans allow brokers to create a system of prevention and recovery should your clients’ sales slowdown. A wide range of risk assessment and policy templates help ensure no stone is left unturned to help your client build a plan for a more resilient future.
Challenge 3: AI and new technologies
In the UK, 33% of medium-sized companies, and 15% of small companies had incorporated at least one AI technology in their business by 2022. The most adopted solutions focus on data management and analysis (9%), which suggests that the technology could play a vital role for a wide range of businesses. As more SMEs invest in technology their risk profile changes, it’s important then, that brokers proactively help business leaders to find the right level of insurance to cover their investments.
How we can help
By ensuring your client speaks to you about any possible changes to technology or equipment in advance of them being installed within their business, you can ensure that we are then best placed to advise on the most appropriate cover for your client. By understanding how AI and technology is being used in their business, we can avoid under-insurance, spot possible new business interruption issues and any new vulnerabilities new tech may give rise to.
Challenge 4: Employee welfare
Employees are usually SMEs greatest assets, taking proactive steps to ensure they’re properly looked after, can help to reduce your clients’ exposure to risk. According to a 2023 global workplace survey, stress levels have remained at a global high since 2020. With a difficult political and financial landscape and workforces struggling to adapt to new ways of working post-pandemic, that stat doesn’t look to change anytime soon.
How we can help
Risk Assist’s Health and Safety Services help businesses to spot any gaps or weaknesses in their compliance and gives step by step advice on how to fix them. By filling in the 20-minute questionnaire, you can support clients in building an action plan to help them minimise risk. And if your clients have any questions around employee welfare, our Ask the Expert service connects you with HR professionals to answer any questions they might have with their expert advice.
Challenge 5: Supply chain issues
Interruptions to supply chains are costly and unpredictable. Back in 2021, $9.6bn of goods were held up every day during the Suez Canal blockage and problems near the Red Sea in 2024 have seen shipping costs spike for small businesses. There’s also increased pressure for businesses to ‘go green’ with their supply chain, which while for the greater good can create extra work.
How we can help
NIG can help SMEs navigate choppy supply chain waters through the Supply Chain Portal on Risk Assist. The online tool helps you to prioritise which suppliers are key to your business and manage risk appropriately. Simply answer a set of multiple-choice questions to give your clients’ contacts a red, amber or green supplier vulnerability rating and start managing risk more effectively.
To gain access to all of these great tools and more login into Broker Risk Assist here.
Despite a tricky 12 months ahead, 56% of UK businesses are expecting an increase in turnover in 2024. The highest level since Q1 2022.
Authored by NIG
