Flood, fire top SMB concerns, researchers findS
oftware-as-a-service provider Womply recently polled U.S. small business owners about the biggest threats to small and midsize businesses (SMBs) today and found natural disasters, such as earthquakes and hurricanes, ranked No. 4. The study, which polled 2,261 small business owners in all 50 states, indicated that threats to company revenue and the physical store are seen as most damaging, Womply stated.
The top three dangerous threats, respectively, were major damage from a flood, fire, etc.; a major slowdown in sales; and theft or robbery at the place of business. Coming in at No. 5 was legal action against the business.
"American small business owners fear large-scale events that would result in massive property damage or serious interruption of cash flow," said Womply spokesman Brad Plothow. "Local, independent businesses can't absorb huge costs as effectively as larger corporations, and revenue is always top of mind. These concerns shape how Main Street entrepreneurs perceive business threats."
San Francisco-based Womply also provided other highlights from the survey. These include:
- Operating hand to mouth: 1 in 5 respondents would shut down within 30 days if sales stopped, and 3 in 4 would survive less than six months.
- Fear factor: Owners with smaller financial safety nets are typically 2-6 times more likely to consider a wide range of business threats to be "extremely damaging."
- Saving for a rainy day: 77 percent of respondents plan to save more money in the next 12 months to reduce their risk from business threats.
- Underinsured: In general, small business owners aren't insuring themselves sufficiently against the threats they consider most damaging. For example, 67 percent of owners with less than a month of reserves consider floods, fires, and other disasters "extremely damaging," but only 21 percent have disaster insurance and only 14 percent have business interruption insurance to maintain cash flow during a stoppage.
- The Trump effect: 40 percent of respondents consider the Donald Trump presidency to be a benefit to their business, whereas 27 percent view it as a business threat.
Political fallout:The most damaging policy changes for small businesses would be increase in healthcare costs and increased taxes.
"Local commerce is a huge driver of economic value, so we need to understand how fragile the small business ecosystem really is," Plothow said "For small business owners, their companies are their livelihoods. There's much more we can do to protect the nation's vital small business community against threats that could undermine them or, in some cases, force them to close forever."
To learn more, visit www.womply.com .
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