SEVEN in 10 small and medium businesses are feeling the pressure of rising costs, with fears that they may have to close their doors. A study of 500 small UK businesses revealed that 88 per cent are working hard to cut overhead costs.
Despite their efforts, 69 per cent of businesses still worry about the possibility of closure. The ongoing increase in material costs and hidden fees from banks are major concerns for 49 per cent and 19 per cent of businesses, respectively.
Small British businesses are estimated to be paying 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 potentially rise.
To prevent passing on costs to consumers, 35 per cent of businesses are negotiating better rates with suppliers, while 31 per cent are reducing energy usage. Unfortunately, 56 per cent have had to resort to layoffs, with 84 per cent viewing it as a last resort.
Wise commissioned the research and is advocating for its End the Opt Out campaign to push for transparency in fees charged for international transactions. According to their findings, small businesses are losing £2.8bn annually due to these fees.
Arun Tharmarajah, director of European payments at a money app, highlighted the challenges faced by business owners during these tough times. He emphasized the importance of finding solutions that don’t burden customers with rising costs.
Despite the struggles, some businesses like Troise & Sons barbers in London are thriving and looking to expand into Europe. Founder Davide Troise expressed the difficulties in dealing with UK banks for international expansion but remains determined to grow his business.
The top contributors to increased small business costs include materials, overseas shipping costs, staff wage increases, supply chain costs, and fees charged by banks. As businesses navigate these challenges, finding innovative solutions and advocating for fair practices are crucial for their survival.