Unreliable broadband could cost limited companies

Tuesday 30 September 2014

Limited companies, sole traders and anyone else thinking of setting up a business could find that their work is put in jeopardy if their internet connection were to go down.

According to a new report by Citizens Advice, more than half of small businesses who use the internet would find themselves losing money, business or potentially not be able to trade at all if their internet connection was not reliable.

The report surveyed 2,000 small companies and found that a high portion of small businesses had faced problems with their internet compared to other important services, such as energy, the post and water.

It was found that 30 per cent had experienced a problem with either their phone or internet services over the last 12 months. What's more, three in ten say they are concerned about unreliable broadband.

Close to one in four small businesses said that they had complained to their internet provider about certain problems. The most common issue that was complained about was intermittent service or no connection at all, with 92 per cent of respondents who had complained citing this.

Chief executive of Citizens Advice Gillian Guy said: “Poor broadband services are costing small firms business.  Many are using the internet to communicate with customers, place orders for stock and shop around for the best priced supplies.  A reliable broadband service is essential for firms to be able to operate."

The report also looked at a number of other issues that small businesses are finding a challenge when they are engaged with regulated markets.

Close to one third said they are worried about a lack of customers or demand, 16 per cent said they are concerned about access to finance and 46 per cent said they are troubled by the cost of electricity.

While businesses cannot avoid the cost of electricity, the amount that they need to use and what they pay can vary greatly.

Companies who do not use a lot of electricity may find that they are unable to negotiate a good deal with a supplier. Alternatively, they may find that the types of deals and contracts that best suit their needs do not exist.

Supporting this, a 2014 survey by the Federation of Small Businesses found that 65 per cent face difficulty when switching supplier.

Commenting on this difficulty, Ms Guy said: "While access to finance continues to be a worry for some firms, it is the cost of running equipment and lighting offices that is a more common concern as firms fear prices are only going to go up."

She said that business groups and regulators need to work to make sure small businesses are not disadvantaged and are able to grow. This is because small businesses do not enjoy the same consumer protections enjoyed by household and do not have the same powers of negotiation that are held by big business.

Ms Guy added: "Britain is enjoying a surge in entrepreneurialism but all too often the needs of small businesses fall through a gap."

By Victoria McDonnell

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