Businesses 'must adapt to changing market'

The biggest risk to businesses is that they do not adapt to changes in their trading environment, according to experts.

A report out this week from Aviva found that more than half of small and medium enterprises (SMEs) have taken deliberate steps to diversify their business in order to survive the recession.

Simple measures like new products or services or opening at weekends have been used to combat the downturn, which has seen management skills tested.

The report also found that some SMEs were forced into taking unnecessary risks, such as enforced reductions in overheads, which is leading to cut-backs in business protection and operational security.

George Derbyshire, chief executive at National Federation of Enterprise Agencies (NFEA), said: "Risk is an unavoidable part of business, and for many people that is part of the attraction. The trick is to manage risk and to do that you must firstly recognise it."

Mr Derbyshire added that the NFEA would not put anyone off diversifying their business but recommended that they should not neglect their "core business".

How does your company deal with change?  Have you diversified during the recession?