Almost half of UK SMEs turn down work because of unreasonable demands

posted by 2 years ago in News

Are you finding yourself having to turn down new contracts because of unreasonable demands?

A new study has claimed ‘unfair reasons’ are behind small and medium sized businesses turning down new contracts or orders.

The research, carried out by Hitachi Capital highlighted factors as being how the contract would not pay enough, or it was priced too cheaply (25%), a lack of management time and the customer known to be a bad payer (24%) or that they were offered unfair payment terms (23%).

Half of the 501 business owners questioned said they’d lost out on up to £10,000 in the past year due to rejecting contracts. Start-up businesses were found to be at the most risk, with 28 per cent having lost between £20,001 and £30,000 by turning down work.

So, who turns down the most work?

Companies in Northern Ireland missed out the most, with only 21 per cent who can claim not to have turned down a contract.

When looking at the different sectors, manufacturing businesses appear to struggle the most, with 42 per cent of their business owners stating they have turned down orders on several occasions, due mainly to the unreasonable demands made by customers.

And the least?

Yorkshire businesses were proven to be least likely to turn down contracts and orders, though it is the region that loses out on more money than the average by doing so. For example, nearly 40 per cent of them lost out between £30,001 and £100,000.

Findings indicate that Retail and Wholesale businesses appear to be the ‘healthiest’, as they are less likely to turn away work.

On a more positive note…

66 per cent of respondents said they have not had to invest personal funds into their business in the past year. The study also revealed that over half of companies (60%) do not anticipate Brexit causing them to reject more contracts or on them taking on less work over the coming years.