The spiralling business costs that could halt revenue for small firms
Over seven in ten small UK business owners believe that revenue will either stall or shrink over the next year, according to a new study, as a perfect storm? of growing business costs threatens profits.
The Economic Imperative? report, by commercial insurer RSA, found that inflation alone could represent a 6.8bn bill for owners to manage. At 1.6 per cent in 2016, inflation is set to rise to 2.7 per cent over the next year.
The study concluded that business rate hikes and auto-enrolment costs added a further strain on the spending power of owners, whileimported goods have become more expensive as the value of sterling continues to decline.
Currently under review, the average small firm could see business rates rise by 8.4 per cent. According to separate reports, London businesses could see an increase of 100 per cent.
The illustrate the wider impact of escalating business costs, the study suggested that a one per cent revenue deduction of every small company would cost the UK economy 2.4bn.
Commenting on the perfect storm? expected to hit small businesses in 2017, Russell White, a commercial risk solutions director at RSA, warned owners to heed the warnings and make preparations.
the business environment is expected to become much harsher in the coming year, and it’s crucial that businesses plan ahead to ensure that they are prepared, he said in a statement.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.