Over half of small businesses in the UK have experienced a major business disruption, an entrepreneur think tank has found.
The report, by the Tenon Forum, revealed that the average cost of a business interruption is almost £23,000.
Just over a quarter of incidents are due to technology failure, with another quarter caused by major power or utility failure. Around 8% have suffered from a natural disaster, such as fire or flooding, while 3% say they have been victims of a terrorist attack.
According to the think tank, a quarter of the businesses affected by disruptions had to pay out over £10,000 to rectify the damage. In the Midlands and Wales, this figure rose to over a third.
Despite the costs, almost a third of businesses do not have any plans in place to deal with interruptions – although around half of owners believe their company is ‘vulnerable’ to major disruption.
Tenon’s business continuity manager, Trevor Williams, said it is essential for business owners to be prepared for interruptions.
“It could be a technological failure or a repeat of last year’s floods, where over 7,000 businesses were affected,” he said.
“The unpredictable nature of business means it’s vitally important that owner-managers put rigorous plans in place to ensure their business can survive any disaster which may strike.”
“By failing to put adequate plans in place, whether this is checking that insurance policies are robust or ensuring all data is backed up, entrepreneurs are putting themselves at risk of costs rising into the tens of thousands – something which many businesses can ill-afford,” he added.
© Crimson Business Ltd. 2008