Most small companies have not been profitable in 2009
New research shows that 19% of SMEs have not recorded a profit since the second quarter of 2008, and unsurprisingly 55% have not been profitable at all in 2009.
The survey, conducted by Continental Research, showed that a significant 10% of SMEs had not recorded a profit since the last quarter of 2007 or earlier.
Size seems to make a difference as well - SMEs with a turnover between £50k and £1m were the worst hit, with 20% not recording a profit for the past year. This compares with 7% of businesses with a turnover over £1m.
When will the upturn begin?
When businesses that had not been in profit since 2008 or earlier were asked to predict when they would be profitable again, 32% thought they would have to wait until at least the first quarter of 2010, with 10% not expecting an upturn until 2011 or later.
57% of these were more optimistic, expecting to return to profitability by the last quarter of 2009 or earlier. Once more, companies with bigger turnovers are more optimistic: 38% of larger businesses expecting to be profitable in the current quarter, compared to 31% of SMEs.
When polled about the general economic recovery, 32% of respondents thought it would be more than a year before things begin to improve – the third quarter 2010 or later, although 24% say it will be spring next year.
Shiona Davies, Director at Continental Research commented:
“These figures endorse a plethora of anecdotal evidence we read every day: times are tough for small and medium sized business and the smaller the business the tougher it is. There has to be concern that such a substantial proportion of SMEs are not profitable and that many do not expect to be profitable until at least this time next year if not beyond, making their long-term viability highly questionable.”
Posted May 6, 2009
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