More than half of SMEs in Yorkshire have never had to turn down work, which is significantly higher than other regions, according to new research.
The study shows how businesses in the area have never had to reject a contract or order because they couldn’t deliver it, which contrasts the fact that half of businesses across the UK that do say no to paid work.
The main cause for the majority of businesses turning down work includes how the contract would not pay enough, or it was priced too cheaply, a lack of management time and the customer known to be have a bad reputation or that they were offered unfair payment terms.
Although the research shows that businesses in Yorkshire are less likely to turn down work, the region loses out on more money than they average when they do so, with 40 per cent losing out between £30,001 and £100,000.
Of the business owners surveyed across the UK, half lost out on up to £10,000 in the past year due to rejecting contracts, with initial ‘startup’ businesses at the most risk, with 28 per cent having lost between £20,001 and £30,000 by doing so.
As for the future, however, the majority of companies agree that they don’t think Brexit will impact on them rejecting more, or acquiring less work in the years ahead. An even higher percentage have not had to invest personal funds into their business in the past 12 months.
Andy Dodd, managing director at Hitachi Capital Invoice Finance, who commissioned the research, said: “SME’s are unfortunately having to decline contracts and orders due to unfair payment terms and unreasonable asks, not because they can’t deliver the work.
“Bad payers and unrealistic contractual terms can have a huge impact on any business, especially those that are relatively small or in startup.
“This is often part of a wider problem, not all business owners have the time and resource to chase up invoices or can risk working with an unreliable supplier.
“Our research from November last year found that 27 per cent of SMEs are in ‘survival mode’ with investment plans on hold, highlighting how SME’s simply cannot afford to be turning down work, which more than half are currently doing.”
The research also shows that retail and wholesale businesses appear to be the ‘healthiest’, as they are less likely to turn away work.
