A new survey amongst 402 decision-makers within UK small and medium enterprises has revealed the largest challenges for UK businesses in the new financial year. It found that:
Nine in 10 (89%) SME decision-makers consider rising energy bills to be the biggest threat to their business
A third (33%) of SMEs consider this to pose a major challenge to their organisation
Soaring inflation is also considered a challenge by 87% of SMEs
82% consider rising interest rates to be an obstacle for their organisation
Rising energy prices pose a “major” challenge to one third of UK small and medium enterprises (SMEs), according to new research from NerdWallet.
The financial comparison website surveyed 402 decision-makers within UK SMEs, and found that over two thirds (67%) of decision makers are finding long-term financial planning difficult due to the current economic climate.
Nine in 10 (89%) SME decision-makers stated that rising energy prices are the biggest threat to their business. A third (33%) consider them to be a “major” threat to their organisation.
87% of SME decision-makers consider skyrocketing inflation to pose a challenge to their organisation. A further 82% are struggling to contend with rising interest rates.
Other concerns for SMEs include rising rental costs (72%) and struggles accessing finance such as business loans, credit cards or investment (71%).
Indeed, almost a quarter (24%) of SMEs believe that rising interest rates have made it more difficult for their organisation to access finance.
Meanwhile, 46% of SME decision-makers have been unable to budget for salary increases in line with inflation. The majority (57%) state that their organisation has raised the price of goods and services in line with rising organisational costs.
Connor Campbell, personal finance expert at NerdWallet, said: “SMEs have faced countless challenges throughout the previous two years. And unfortunately, NerdWallet’s research highlights that there is unlikely to be respite in the foreseeable future.
“Clearly, there are some difficult decisions to be made – increasing the prices of goods and services, for example, will likely be considered an unfortunate necessity to keep businesses afloat. As such, the Government must ensure that SMEs are aware of the tools available to ease the burden slightly. Publicising schemes, such as Start Up Loans, would be a good start. Alternatively, SMEs could make use of comparison websites to explore alternative finance options.
“There is no quick fix to the challenges faced by businesses. But there are tools which could offer something of a financial lifeline. As such, SMEs should be encouraged to remain as flexible as possible, and make use of all the tools at their disposal to explore their options. In doing so, SMEs will be able to gradually regain control of their finances.”