Over a quarter (26 percent) of the UK’s small businesses think they will be forced to increase their prices by the end of 2022 unless they take steps to prepare for further supply chain challenges, reveal the figures released today by commercial insurance specialist NFU Mutual.
Thirty-seven percent predicted reduced profits, with 25 percent expecting to lose customers, add the figures.
The news comes as the Russia-Ukraine conflict prompts concerns that supply chains already stretched by Coronavirus and Brexit challenges will face further disruption.
Zoe Knight, Commercial Insurance Specialist at NFU Mutual, said: “The situation in Ukraine is devastating, and our thoughts are with those directly affected.
“The shockwaves will be felt across the world and across business sectors. Nearly a quarter of small businesses have already seen a shortage of the primary materials required for sale or manufacture this year, but it’s not just these end-user items seeing disruption. Businesses should consider the impact supply chain challenges may have on other critical provisions like gas, electricity and IT equipment.
“This latest research shows the importance of horizon scanning- considering current and upcoming risks and reacting to protect your business from the potential impacts. With only 17% of small businesses performing an ongoing assessment of risk, we’re concerned that the nation’s businesses are leaving themselves vulnerable, and urge owners to take urgent action to increase their resilience.”
NFU Mutual has partnered with business continuity experts Inoni to produce a range of free tools to help make sure businesses are prepared should the worst happen. The toolkit, which includes supply chain guidance, has been created specifically for small businesses. The resources offer support with assessing current business resilience and identifying possible areas for action. Free downloadable continuity plan templates and a series of articles highlighting key risks and mitigating actions are also provided.
In partnership with Inoni, NFU Mutual offers the following advice to minimise supply chain continuity risk:
- Assess current risk trends and identify supplier exposure, such as reliance on overseas parts or production
- Build buffers: maintain enough stock to cover the transition to an alternative supplier
- Identify which suppliers are business-critical, and the time in which non-supply starts to have an impact
- Identify whether an alternative exists, and the time, practicality and cost to implement this
- Select on the basis of transparency and carry out annual due diligence checks
- Find local suppliers and distributors to minimise trade risk and order times
- Assess supplier capacity (quantity), specification (quality) and terms
- Assess the risks associated with each supplier and whether they share common sources
- Dual-source (use at least two suppliers) during normal operation and risk-manage each critical supply
- Collaborate and participate in business continuity tests and exercises, and share plans