NEARLY TWO THIRDS OF UK BUSINESSES IMPACTED BY SEASONALITY…
One in 20 (5%) UK companies close their business during seasonable periods to save costs
One in five (20%) businesses in the West Midlands change products and services because of seasonality – the most of any UK region
Tough summer months expected for some UK organisations, as more than one in 11 experience decrease in turnover
As businesses across the UK prepare for the summer period, new research1 from Santander Corporate & Commercial has found that nearly two thirds (61%) of British small and medium-sized businesses are impacted by seasonality – i.e. in the summer or during Christmas – with more than a third (37%) saying they suffer from a negative seasonal impact.
Of those affected, one in 20 (5%) admit that they close their business entirely during seasonable periods to save costs – surprisingly, the highest number saying they close over this period are businesses with turnovers in excess of £20 million (23%). 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.
Regionally, businesses in the West Midlands are more reactive to seasonality than any other region in the UK, with one in five (20%) stating they change their products and services as a direct result. This is more than double that of the national average (8%). To help manage seasonal fluctuations, 17% of businesses in the region admit they increase or decrease staff members. The research also revealed that businesses in the West Midlands perform well in the warmer months with nearly a third (31%) saying their turnover increases by more than 25% in the summer.
Nationally, more than a quarter (26%) of businesses fail to make any arrangements to protect their bottom line, despite admitting suffering an impact from seasonality.
Smaller UK companies (those with annual revenues between £50,000 and £100,000) are less likely to plan for seasonal variations than larger businesses, with over a third (36%) failing to prepare in advance. On the other hand, larger businesses (those with annual revenues of over £20 million) are leading the way at planning, with more than half (52%) preparing for business disruption, which includes the use of general cash management (19%) and invoice/supply chain financing.
Leon Marklew, Regional Director for Santander Corporate & Commercial, said: “Certain seasons can represent a period of severe financial concern for many UK businesses, particularly those based in the West Midlands – to the extent that many need to close during this time or make drastic structural changes. However, by planning and preparing for disruptions in advance, many organisations can avoid adverse fluctuations in supply and demand. Importantly, companies can use a number of financial and cash flow management tools to help ease them through difficult times.”
|How far ahead do you plan for potential increases / decreases in demand due to seasonality? (All West Midlands-based businesses)|
|On an ad hoc basis||
|No arrangements made for seasonal changes||
The research revealed that of all UK businesses affected by seasonality, a third (34%) say their turnover decreases over Christmas compared to one in 10 (11%) which report a decrease in the summer. On a positive note, 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%.
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