SME Insights Report: half of small business owners forced to increase prices
2-minute read
Simply Business’s new SME Insights Report reveals that nearly half of small business owners will be forced to increase prices over the next six months to cope with rising costs.
Those rising costs are the biggest challenge for 70 per cent of small business owners in 2022, complicating their post-pandemic financial recovery.
We surveyed more than 1,000 small business owners from across the UK to understand their challenges and frustrations, as well as their optimism about the future.
Our survey reveals that small business owners are being forced to implement price increases, slow their plans for expansion, and even stop hiring.
Yet despite all this, 71 per cent say that they feel optimistic about their business’s prospects over the next six months.
Download your free SME Insights Report
To see more data, download our full report. Find out how Brexit has affected small businesses, as well as whether they expect to see more support from the government.
DownloadWhat survival tactics are small businesses putting in place?
With nearly half (49 per cent) of small business owners set to increase their prices, our survey also reveals a number of other survival tactics.
In terms of raising prices:
- one in five (21 per cent) intend to raise prices by 6-10 per cent
- nearly one in 10 say that they will increase prices by as much as 20 per cent
As well as raising prices, businesses are putting expansion plans on hold:
- nearly half say that they’re unlikely to hire any additional employees
- two in five will be holding off on opening new or additional premises
- one in five are unlikely to buy any new equipment or tools, as owners look to reduce spending
With three in five (62 per cent) business owners expecting the economy to worsen in the next six months, these tactics may help them weather the storm.
Alan Thomas, UK CEO at Simply Business, said: “The temperature of the nation’s self-employed is absolutely clear in our latest research. For 70 per cent, rising costs – as many still battle the lasting effects of the pandemic – represent the single biggest risk to recovery.”
Small businesses remain confident
Despite the survival tactics outlined above, 71 per cent of business owners remain confident about the future of their business:
- 22 per cent are very confident
- 34 per cent are more confident than six to 12 months ago
Our survey reveals that 51 per cent of businesses are optimistic about the future. One in five are excited about the next six months, and just over one in 10 expect to increase profit by 10-20 per cent this year.
Jonathan Portes, Professor of Economics and Public Policy at King's College London, said: “Small businesses in the UK have had to cope with overlapping economic shocks over the past three years – the pandemic, Brexit, and now the cost of living crisis.
“What this study shows is that despite the general economic pessimism, most businesses remain resilient. Like consumers, they expect the UK economy to worsen significantly over the next year, but they remain reasonably confident about their own prospects in the face of rising cost pressures.
“UK businesses might remain resilient in the face of further economic turmoil, but they need and deserve a more coherent longer-term strategy for the UK economy.”
How do you feel about your business’s future? Let us know in the comments below.
Guides for small businesses
Looking for self-employed insurance?
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.
Start your quote
Written by
Sam Bromley
Sam has more than 10 years of experience in writing for financial services. He specialises in illuminating complicated topics, from IR35 to ISAs, and identifying emerging trends that audiences want to know about. Sam spent five years at Simply Business, where he was Senior Copywriter.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.
Subscribe to our newsletterInsurance
Public liability insuranceBusiness insuranceProfessional indemnity insuranceEmployers liability insuranceLandlord insuranceTradesman insuranceSelf-employed insuranceRestaurant insuranceCommercial van insuranceInsurersAbout
About usOur teamAwardsPress releasesPartners & affiliatesOur charitable workModern Slavery ActSection 172 statementSocial mediaSite mapAddress
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2023 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.