Home Business NewsBusiness The big loss: Here's what cost small firms £4bn last year

The big loss: Here's what cost small firms £4bn last year

22nd Aug 16 9:17 am

New research reveals shocking figures

New research from the Federation of Small Businesses (FSB) suggests half (52%) of small firms have been stung by unfair contract terms with suppliers, costing nearly £4bn in the last three years.

Suppliers are failing to make auto-rollover clauses clear up front (24%), tying businesses into lengthy notice periods (22%), charging high early termination fees (20%) and concealing details in small print (20%).

Two in five (40%) respondents said they felt powerless to do anything about unfair contract terms because the supplier was too important or powerful to challenge. This highlights that small firms can be just as vulnerable as consumers when buying goods and services, and they need better protections.

Mike Cherry, FSB National Chairman, said: “Small firms on the bad end of a deal are losing out to the tune of £1.3 billion each year. We have identified persistent problems with suppliers, across sectors, treating small firms unfairly. This suggests the market is failing to deliver value for money products and services for small business customers.

“Small businesses don’t have the time, expertise or purchasing power to scour the market to find and negotiate the best deals. Small business owners behave in a similar ways to consumers, but they don’t have the same guarantees of quality or legal redress in an unfair situation.”

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