Survey Finds Seasonality Affects UK Businesses

Nearly two thirds of UK small and medium-sized enterprises (SMEs) are impacted by seasonality, with one in 20 even admitting they temporarily close their business entirely in order to save costs according to a survey by Santander Corporate & Commercial.

The research was conducted for the group in March by BDRC Continental, among senior financial decision makers at 451 UK SMEs with a turnover of over £50,000. It also found that:

  • Over one in 11 UK SMEs experience decrease in turnover in the summer months.
  • Nearly one in five (17%) say they have to alter their staff numbers.
  • One in four (26%) businesses fails to plan financially for seasonal disruptions.

Among other findings, 34% of UK businesses affected by seasonality say their turnover decreases over Christmas. One in four businesses (25%) say turnover increases by more than a quarter in the summer, with 7% saying it goes up by more than 50%.

On a regional basis, firms in Scotland and South West England are the most negatively impacted during the summer months, with 35% and 20% respectively saying their turnover decreases during this time. The industry worst affected by seasonality is transport and logistics (27%), followed by wholesale (26%) and construction (19%).

Some 6% of UK businesses admit to relying on credit cards to manage seasonal fluctuations in supply and demand, 4% say they use businesses loans, while a sizeable proportion (17%) say they increase or decrease staff numbers.

 
Of those businesses impacted by seasonality, a fifth (20%) say they account for this in their annual business plan; however, the research also found that 26% fail to make any arrangements to protect their bottom line despite admitting being affected by seasonality.

Smaller UK companies with annual revenues of £50,000 to £100,000 are less likely to plan for seasonal variations than larger businesses, with 36% failing to prepare in advance. Larger businesses with annual revenues in excess of £20m are better at planning, with 52% preparing for business disruption, which includes the use of general cash management (19%) and invoice/supply chain financing (SCF).
Santander UK SMEs seasonality
(1) Research conducted by BDRC Continental amongst senior financial decision makers at 451 UK SMEs with a turnover of over £50,000, between 4-14 March 2013 using a telephone methodology.

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