Impact of Crime on Small Businesses Report 2008 - Gauteng Online

THE IMPACT OF CRIME ON SMALL BUSINESSES<strong>of</strong> the higher incidents <strong>of</strong> serious crimes such as burglary and robbery, and destruction<strong>of</strong> property, in these areas. Over a third <strong>of</strong> businesses who did not have insuranceagainst crime claimed that the costs <strong>of</strong> insurance were too high and/or thatthey could not afford insurance. This figure was highest among firms in the innercity, firms located in areas characterised by high crime, and informal and low levelretail vendors and construction businesses. Fifteen percent <strong>of</strong> responses stated thatthe business was too new or too small to be insured (sample size: 225).8.2 Coping mechanisms in the absence <strong>of</strong> insuranceRespondents who had reported that they were not insured were asked what supportsystems they might have access to in the event <strong>of</strong> a major crime event. The mostcommon response across the sample was that firms would resort to reserve funds.Among businesses with turnover above R100 000 per annum it accounted for thesignificant majority <strong>of</strong> responses. Over twenty percent <strong>of</strong> businesses would rely onloans or credit to see them through. This response accounted for over 25 percent <strong>of</strong>responses for businesses with turnover between R15 000 and R100 000, and businesseswith turnover between R400 000 and R1 million. Just over ten percentwould borrow money from family and networks. This response was most prominentamong businesses in the R15 000 to R25 00 turnover band. Just over 15 percent<strong>of</strong> responses suggested that firms would find ways to absorb costs and survive.The smallest businesses (with turnover below R15 000) were most likely to respondalong these lines. Almost 20 percent <strong>of</strong> respondents indicated that they mighthave to close down in the event <strong>of</strong> a serious crime. This response was higher thanaverage among businesses in the lower turnover bands. A small number <strong>of</strong> businesses,all with turnover below R100 000 per annum, indicated that they wouldprobably relocate following a serious criminal incident.67