55% of small firms in a sample of 1,200 were functioning below capacity and did not expect any growth this year, according to statistics from the Federation of Small Businesses (FSB).
87% of companies confirmed the cost of operations next year, compared with the same period last year, with rising costs across the board in fuel, utility and tax contributing to the increase. Such increases in outflows have stagnated the hope for growth and expansion – with many simply hoping to minimise the damage when adjusting to challenges that come in the form of Brexit, post-pandemic adjustment and the economic effects of the conflict in Ukraine.
Manufacturing and retails sectors have been hit the hardest, with negative impacts on their operations with supply chain disruption all over the place.
Some comfort from the FSB’s statistics is that business confidence had increased on average from 12 metric points to 15.3 metric points. This demonstrates that small business owners are hoping to see a progressive improvement on their commercial performance. However, this confidence differs per industry.
Businesses in food communications and accommodation are reporting positive readings, but hospitality and retail industries reported negative readings. Retail sales dropped by 1.4% in March according to statistics from the Office of National Statistics (ONS).
View on Growth
Martin McTaguesaid, the FSB chair, said: “It’s encouraging to see small business confidence back in positive territory, though the picture across sectors is distinctly mixed.
“The small business community shrank in size to the tune of hundreds of thousands over the pandemic. With Covid numbers now falling, this needs to be the summer where we start to reverse that trend – policymakers should be doing all they can to facilitate and encourage start-ups and side hustles.
“The message from us to consumers, policymakers and corporates alike is clear: let’s make this a small business summer – backing the 99 per cent on which our recovery will depend.
“As things stand, spiralling costs are eroding small business margins at a rate that many have never experienced before, whilst workplace absences are making it hard to operate at full capacity in a tight labour market.”
Businesses are struggling to come out of the pandemic swinging with extensive growth. A good reason for this might be because some of the Covid-19 financial support schemes are no longer in operation.
Another reason might be that some businesses are struggling to make repayments on schemes that they have borrowed from, such as Bounce Back Loans.
At Business Helpline, we can help you to straighten out your finances for a more sustainable future. We can also help you to refinance in order to meet your needs for optimum growth. Refinancing can help you to:
- Purchase a larger amount of raw materials
- Pay the wages of more staff members in order to reach deadlines
- Pay off existing debts that are preventing growth
Get in touch with us at 0800 088 2142 if you want to take back control of your financial future.