Small firms take steps to combat escalating costs

New research reveals that at least one in four small businesses are trying to protect their margins by reducing their energy usage and putting up prices

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A survey conducted by Iwoca has found that the rising cost of doing business is currently the biggest worry for owners of small firms, with nearly half (46%) saying it is their main concern, ahead of supply chain issues and staff and personal illness.

The poll results show that owners of limited companies are ten percentage points more likely to say that inflation has impacted their business than sole traders (56% compared to 46%). However, owners of limited companies are more confident that they can manage the rising cost of doing business, with 26% reporting that they can afford to absorb the rising energy costs compared to 15% of sole traders.

Many business owners have started taking steps to combat rising costs, including one in four (26%) of small business owners who say they have increased their prices due to rising inflation.

Not surprisingly, energy costs are a big issue for small firms. The findings show that 36% of small business owners saw their energy bills increase in 2021; 20% saw an increase of over 15%, and 10% reported a hike of 20%. Now all businesses face a record rise in energy bills from April and another potential spike in October.

As a result, 30% of business owners say that they will have to reduce their energy usage. However, nearly one in five (17%) said that doing so would negatively impact their business.

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