Global Business Monitor reveals challenges for SMEs in 2019
- Geo-political uncertainty diminishes prospects as confidence in local economies falls from 54% in 2017 to 48% in 2019
- Rising costs, government regulation and cashflow are the top three issues facing small businesses
- One in three (32%) SMEs are struggling with cashflow and less than half expect growth in 2020
Rising costs are the greatest challenge facing small businesses around the world, according to the latest Global Business Monitor study from global SME partner, Bibby Financial Services (BFS) and global leader in trade credit insurance Euler Hermes.
Findings of the research, based on a survey of more than 2,300 SMEs in 13 countries across Asia, Europe and North America, show that two-fifths of businesses (42%) believe rising costs and overheads are their greatest challenge. Government regulation (36%) and cashflow (32%) were also cited in the top three concerns in 2019.
Despite concerns about the knock-on effects of global uncertainty, almost half say they believe their business performance will improve in the next 12 months, and a third believe they will maintain existing growth levels.
Across the study, SMEs in Hong Kong were most concerned about the health of the global economy (70%), with Slovakian businesses (39%) least likely to show concern.
Ludovic Subran, Global Chief Economist, Euler Hermes, added: “As the risks of a recession rise and global GDP is expected to grow at its slowest pace since 2009 in 2020 (+2.4%), it is all the more important that SMEs have virtuous payment loops to avoid going bust. Global insolvencies are expected to rise by 8% in 2020 for the fourth consecutive year, and one in four bankruptcies for SMEs comes from a non-payment.”
The third Global Business Monitor since 2016 shows that SMEs are continuing to invest to overcome challenges and 85 per cent say they plan to invest throughout the reminder of 2019 in areas such as sales and marketing, IT, and employee training.