SMEs suffering more than larger firms from economic downturn

SMEs are seeing larger decreases in sales revenues than big companies, according to research by insolvency trade body R3.

29% of smaller businesses have seen shrinking revenues in Q4 of 2011 when compared to Q3, in comparison with only 6% of large businesses reporting similarly.

More than one third of SMEs are also likely to see decreased profits in the first three months of 2012.

The president of R3, Frances Coulson, felt the report highlighted the need for SMEs to receive more assistance, “Either more support is needed in 2012 to enable a real recovery, or some businesses will inevitably fail rather than continue to limp along, damaging competition.”

But there was some good news, as fewer businesses are seeing ‘signs of distress’ (58%) than the last quarter (68%). The figure was also significantly down on December 2010 (77%).

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