9 August 2012

SMEs ‘discounting and diversifying’ to capitalise on summer events

Small and medium-sized business owners are diversifying and discounting in a bid to capitalise on this summer’s sporting and celebratory events, latest figures suggest.

According to research from the insurer Aviva, the tough economic environment is forcing firms to launch new products and services and increase the number of discount sale periods. 

Many businesses are also offering extended opening hours, as well as increasing stock levels and taking on extra staff in response to events such as the London Olympics.

Of the 500 SMEs surveyed, a quarter expects to enjoy a boost to their business from this summer’s events, although Aviva noted that the positive effects could be short-lived.

The Diamond Jubilee is thought to have increased revenues for 27% of SMEs, with rises in revenue of up to 30% reported.

Commenting on the findings, David Bruce, commercial product manager at Aviva, said: ‘Trading conditions clearly remain tough, while it seems many owners are perhaps being more pragmatic than optimistic in their forecasting of future revenues.

‘Diversification in particular is an excellent way to protect and grow the bottom line, while efforts to capitalise on the Jubilee and summer sporting boost are other examples of this. For some small companies, the investment has paid off, with revenues increasing markedly already this summer.’

He continued: ‘Many small businesses are worried about what will happen later in the year. They need to look at their business plans now and make sure they prepare for this expected bump, even while enjoying the good times.’

However, the research group Experian reported a sharp decline in London shopper numbers at the start of the Olympic Games, with many consumers reportedly staying away because of fears of overcrowding.

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