September 27, 2013
UK small businesses lose billions of pounds every year because they don't shop around for the best deals on insurance and other business services.
The Inertia Factor Report from Post Office International Payments found that small businesses waste an average of £550 each per year because they do not have time to research competitive prices for regular business costs and swap to cheaper providers. Collectively this adds up to a loss of around £2.64 billion annually on office, travel, healthcare, motor and car breakdown insurance policies.
The research reveals that just 39% do any form of competitive research before renewing policies or making regular payments. Time and convenience are the main factors, it says. A third of SMEs automatically use the same provider without surveying the market, while a quarter of the 2,500 businesses that took part in the research said they always use their bank if it provides the service.
The report findings include:
The research also shows that SMEs were most likely to seek out the best deals when organising car insurance (34%) or making an international payment (28%). However, while almost two thirds of businesses polled made payments overseas, 30% said they always used the same provider, and a further 27% thought they were already getting the best deal so they did not shop around.
More than three quarters of SMEs (77%) said they transfer funds abroad using their UK bank, incurring charges for each transaction.