SEVEN in 10 small and medium businesses are feeling the pinch of rising costs and are concerned about the possibility of having to close their doors. A recent study of 500 small UK businesses revealed that 88 per cent are actively trying to reduce overhead costs.
Despite their efforts, 69 per cent of these businesses still worry about potential closure. The ongoing increase in material costs is a major concern for 49 per cent of businesses, while 19 per cent attribute their struggles to hidden fees charged by banks.
Small British businesses estimate that they are shelling out over £3,700 annually in hidden charges, which could amount to three months’ worth of rent in major UK cities. With 15 per cent of businesses looking to expand internationally, this figure could rise even further.
To avoid passing on additional costs to consumers, 35 per cent of businesses are negotiating better rates with suppliers, and 31 per cent are cutting back on energy usage. Unfortunately, 56 per cent have had to resort to implementing redundancies, with 84 per cent considering it a last resort.
Wise, a financial services company, is advocating for transparency in fees charged for international transactions through its End the Opt Out campaign. According to their research, small businesses are collectively losing £2.8bn annually due to these hidden fees.
Arun Tharmarajah, director of European payments at Wise, emphasized the challenges faced by business owners during these tough times. He highlighted the importance of finding creative solutions that do not burden customers with additional costs.
Despite the hurdles, some businesses like Troise & Sons barbers in Hackney have managed to thrive and are even considering expanding into Europe. Founder Davide Troise expressed his frustrations with UK banks and their lack of support for international expansion.
As small businesses continue to navigate rising costs and uncertainties, finding ways to adapt and innovate is crucial. Ending hidden fees and improving legislation to support small businesses could provide much-needed relief in these challenging times.