Medium and small market businesses (SMBs) face many of the same challenges with great views, but how they prioritize the risk, expenses and solutions varies a lot.
According to the latest Nationwide Risk Management survey, medium market business owners are more concerned about economic and financial risks, regulatory changes and technological and supply chain disruptions over the next two years.
Meanwhile, small market business owners also list economic and financial risks as a major concern, but their concerns about technological outages are eclipsed by concerns about market conditions, natural disasters, inflation and labor.
Despite the implementation of different risk management strategies, only 54% of business owners feel very protected from these threats.
Risk management budgeting
Small business owners devote more to their budget (18%) for risk management and security than medium market business owners (6%). Eight in 10 (83%) of middle market businesses have a dedicated safety budget. High -risk industries such as construction and production allocate even more for security by 19% and 13% of their annual budget, respectively.
Middle market business owners report the highest areas of risk mitigation investment include technology/security (40%), followed by increased security/internet security (24%), work/staff (19%), Chain/supply supplier stability (17%), and training programs (11%), according to the survey.
During the same period, small market businesses plan to invest in technology/security (24%), offer/growth (21%), cost/income (20%), recruitment/employee retention (17%) and chain /supply supply/stability supplier (14%).
Impacts of Development Rules and Standards
Owners of medium market businesses agree mostly that the evolution of regulatory and security standards hinder operations. Three -quarters (78%) say the changes had an impact on their risk management needs, and 20% think their business is not prepared to respond to new regulations.
Medium market business owners are more liked to take action, such as additional training, using technology (72% versus 62% of small business owners) and KPI implementation (69% against 58% of owners of small businesses). Technology provides essential risk management or regulatory support for 76% of medium market businesses, with 11% reporting that it is essential for all their risk management activities and 65% using it in specific areas, but not inclusive.
Small business owners are separated, with 51% saying that regulatory changes affect their risk management practices and 48% report little impact.
Where are the gaps?
As businesses clash to implement plans and evolve with technology, there are still gaps. For example, 55% of middle market business owners report that they have a disaster readiness plan, and 60% of small and medium market business owners currently have a autumn protection program. Two -thirds of middle market businesses report that compliance is integrated into the general risk management framework, but only about one -third of small businesses (34%) make the same claim. While half of the middle market businesses (52%) use technology for real -time monitoring of compliance issues, only 29% of small businesses have invested in that technology.
Many owners try to recognize the value and impact of their efforts: only 51% currently see risk management initiatives as effective. Their main challenges with safety and risk management include:
- Cost of security measures (38%)
- Maintenance of security equipment (31%)
- Resources required for performing regular security estimates (30%)
And 21% of businesses report that they do not have a business continuity plan, leaving them vulnerable to operational outages.
“Despite nearly 90% of businesses that have official risk management policies that are regularly reviewed, there is a critical weakness: one in five businesses does not have a business continuity plan,” said Mark McGhiey, leader across the country of management trade lines of risk.
“This gap leaves them exposed to potential interruptions that can severely affect their operations,” he said. “Agents can help identify and fill these gaps with trading customers, partners with them and risk management experts provided by the carrier to develop and implement a comprehensive business continuity plan. These efforts can significantly improve Customer resistance and ensure that they are prepared to navigate unexpected challenges. “
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