Rising costs to SMEs stifling growth

Running costs to small businesses are rising despite declining inflation, the Forum of Private Business (FPB) has revealed in its latest survey.

Over half (63 per cent) of all British businesses have experienced an overall rise in their costs, the results of the Cost of Doing Business survey showed. A high number of people reported increasing marketing costs (76 per cent), while rising energy costs was slightly lower at 70 per cent. Transport and staff costs were both at 65 per cent.

Annual inflation has fallen from 2.7 per cent to 1.6 per cent, but the increasing costs small companies are having to absorb are keeping them struggling with 81 per cent saying the rises have harmed their business.

Seventy-thee per cent of respondents flagged up cash flow difficulties as an impact of these costs adding up, and 63 per cent said it had restricted their growth.

So despite the improving economy, many businesses are rendered unable to harness growth and push forward with their plans for the future.

A massive 82 per cent of the business owners surveyed are expecting bills to continue to rise, with 16 per cent fearing large increases.

An infographic from FPB suggests that businesses focus on getting to grips with cash flow, plan for cost rises, hunt for savings and good deals, and search for alternative sources of finance.

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