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Outlook remains tough for small retailers

Business interruption has been a major challenge to the growth of small to medium sized retail business in 2011 and will continue to be in 2012 according to findings by business insurance company RSA.

Figures released by RSA with Warwick Business School, in its Risky Business Report, show that over half of retailers (52%) surveyed believe that business interruptions such as weather and staff absences have constrained growth.

However, despite the current economic downturn, most retailers are optimistic about the future with the majority of those surveyed saying they would consider an investment of between £10,000 and £100,000 in the next two years to grow their businesses.

Although retailers are unlikely to look to banks to provide this investment with only 11% saying they would seek a bank loan compared to 16% two years ago.

The report also reveals that a third of small businesses (32%) have continued to feel the effects of the economic downturn in the past year.

Cash flow issues affected 16% and 12% struggled to obtain finance.  A similar number, 13%, suffered from increased competition.

Stephen Roper professor of enterprise at Warwick Business School said: “The research demonstrates the robustness of small businesses.

“However, the road to recovery is unlikely to be smooth and SMEs must be aware of the risks that could knock their business off course. Taking positive action to mitigate these potential risks has never been more crucial.”

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