New analysis by one of Europe’s largest small business lenders has found that owners have concerns about certain trading conditions going into 2022.
With rising inflation predicted by the Bank of England, and the threat of rising interest rates this year, nearly three quarters of small business owners cited inflation as their biggest concern regarding the economy.
As energy, fuel and raw material prices rise, almost half of small business owners surveyed named increased running costs as a main concern.
And with the dual impact of Brexit and the pandemic disrupting global trade routes in the past year, a quarter of them also expressed concern about how supply chain issues might affect them, according to the iwoca research.
The threat of further restrictions remains a worry, given the tough trading conditions, with 66 per cent citing additional Covid-19 measures as another key concern.
As concerns mount over the future of the economy and its effect on their business, four in five say that they do not expect to hire this year, with only one in ten predicting they will hire over the next 12 months, despite record vacancies.
Generally, optimism remains low, with almost a third predicting that they will be worse off by the end of 2022; only 28 per cent expect turnover to grow and one in five expect it to shrink.
Harp Gill, Milton Keynes based owner of mobile catering business, The Rub, said: “We have been hit hard by the pandemic over the past two years. COVID restrictions and concerns over the Omicron variant over Christmas, have led to a string of cancellations. Going into the New Year, whilst no new restrictions are imminent, we have been hit by short-term worries surrounding inflation and rising business costs.
“Over the past few months, supply chain issues and rising costs have meant we have had to remove certain meats from our menus including beef and lamb. We hope that as people see the back of the pandemic and get out to celebrate their lives, we will return to normality.”
Seema Desai, iwoca’s Chief Operating Officer, said: “These results show that small business owners are concerned about rising inflation and the subsequent knock-on effect this will bring. Access to finance can help small business owners to make the most of growth opportunities, and that’s why it’s important that lenders like iwoca continue to support small businesses so they can fulfil their full potential.”
Employment issues top SME concerns