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Survey reveals one in five small businesses lose 10% or more profit to theft

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New research by ADT Security reveals more than one in three employees at small-to-medium businesses have been a victim of crime in their workplace.

This is one of the findings from a comprehensive research into the impact of crime on Australia’s small and medium sized businesses.

The ‘Small Business Crime Index’ surveyed more than 500 small-to-medium business owners (SMBs) and 500 SMB employees across Australia. 

One of the most comprehensive researches into small business security measures and perceptions since ADT Security’s inaugural survey in 2010, the study found a vast majority of Australian small businesses had suffered financially from an act of crime, with three in five businesses (60%) losing 5% of their annual business profit to crime. Alarmingly, nearly one in five business owners (19%) estimated losing more than 10% of their annual business profit to crime.

Burglary is the most prevalent type of crime reported with 55% of SMBs being a victim of this at some stage, followed by employee theft of merchandise (27%), shoplifting (26%), vandalism (25%), and employee theft of cash (22%). Fraud was encountered by 16% of SMBs.

The survey also revealed that 14% of SMB owners don’t take any security measures to protect their business. 

According to Managing Director of ADT Security Mark Norton, though crime affects all businesses, large and small, it is especially devastating for small businesses since the potential for the loss of profit and merchandise to overwhelm an SMB is high. In addition to the financial loss incurred due to property damage, business disruption or closure and lost customers and orders, small business owners also need to consider the threat posed by some of these crimes to the physical safety and emotional wellbeing of customers and employees.

Key findings from the study:

Armed robbery had the strongest impact on the business (73%). A quarter of SMBs (25%) noticed a rise in crime in 2012 compared to the previous year. Lock and key (63%), alarm systems (44%), locked safe for valuables (24%), CCTV (19%) and window bars/bollards (17%) were some of the security measures used by businesses to safeguard themselves. Factories and warehouses reported the greatest financial loss from crime. Service station/ convenience store and retail workers are those most likely to have dealt with crime in the workplace (67% and 64% respectively), while more than half (52%) of victims claim the crime they encountered affected them personally. 

Norton concludes that while it is impossible to completely eliminate the risk of crime, business owners can reduce the risk by implementing a comprehensive security plan, thoroughly training employees in how to operate and respond to the security system, identifying security threats and troubleshooting potential weaknesses. 

ADT Security is a world-leading electronic security company providing a number of cost-effective security solutions including ADT Vision, a video surveillance solution designed specifically for small businesses, as well as Sensormatic Electronic Article Surveillance (EAS) systems to prevent shoplifting.

The complete report is available on the ADT Security website.

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