What do UAE SMEs see as the main risks they face?

Ranking risk

Risk is a pressure that comes in many forms. Risk can be anything: from a drop in demand to a fire in the factory, and from a supplier failing you to a senior team member falling sick.
While solid mitigation policies and thorough insurance premiums give some peace of mind, the worry never truly goes away for most business owners and entrepreneurs.
A recent survey polled senior executives at over 200 USE SMEs, asking them to rank what they felt to be the three biggest risks that their business faces. Their verdicts were also compared to 3600 executives form other parts of the world.

 

 

Here are some of the key numbers and trends that we’ve pulled out: where do you feel your
business sits?

  • 33 per cent of SMEs in the UAE feel that stiff competition in the market is the biggest risk they face. This risk stood significantly above all others, though arguably in some ways it is the least challenging too: competition is a factor that you can do something about, whereas other risks are more firmly out of your hands.
  • 20 per cent say that the possibility of weak consumer demand is also up there, making it the second biggest risk they feel they face.
  • 16 per cent also cited legal problems as a key risk.
  • Some 14 per cent of SMEs in the UAE consider the health and safety of employees a potential risk to their operations. This is noticeably lower in comparison to some other markets, such as Europe, where this figure is, for example, 32 per cent and 24 per cent in Austria and Germany respectively.
  • However just 11 per cent see fire damage as a major risk.
  • The numbers ranking theft as a main risk has fallen. Just 11 per cent of SMEs list it in 2014, compared to 18 per cent in 2013.
  • Some 10 per cent of us now see other crimes, such as cybercrime and damage to vehicles, as a risk to be tackled. This is an increase from 6 per cent in 2013.
  • Only 8 per cent view the failure of partners and suppliers as a risk to their business, implying that trust, reliability and longevity probably feature strongly in many of the business relationships in our region.
  • Concerns over natural catastrophe and weather are up to 8 per cent in 2014, from just 4 per cent the previous year.

(Source: The Global 2014 Survey, by Zurich Insurance and Dubai SME)

 

Disclaimer:
“The opinions expressed within this article are generic. Mashreq is not responsible for the accuracy, completeness, suitability or validity of any information on this article. The information, facts or opinions appearing in this article do not reflect the views of Mashreq. Mashreq does not assume any responsibility or liability for the same.”

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