Inflation for small businesses hits nearly 10%
Small businesses are facing annual cost increases of 9.9 per cent, double the general rate of inflation, according to the newly launched Business Inflation Guide (BIG) from MORE TH>N BUSINESS.
In the second quarter alone small businesses, representing 97 per cent of UK business, faced cost increases of 3.4 per cent, with micro-businesses being the hardest hit.
“We suspected that UK small businesses were under great cost pressures, but we could find no data to confirm this,” says Mike Bowman, Head of MORE TH>N BUSINESS. “So we set out to create the first purpose built measure of small business inflation. The results surprised even us.
“These businesses are the unsung heroes of the British economy, representing over 1.6 million businesses in the UK. Now that we have a true picture of rising costs for small businesses, people will be asking the government what realistic measures can be taken to support them, particularly in the current economic climate.”
The Business Inflation Guide (BIG), developed in conjunction with Warwick Business School, reveals that small businesses are bearing the brunt of price increases across almost all expenditure items, but due to their cost structures they are suffering more than general inflation indicators suggest in everything from fuel and energy to labour costs and raw materials.
“When costs are rising small businesses really should leave no stone unturned in the search for savings,” says Bowman. “The top priority, if they haven’t already done so, should be to review all suppliers and negotiate on prices and payment terms - particularly with regard to energy suppliers and other important cost items. Seeking more efficient ways to use energy in the future should also be a priority.”