Research and reports
Small businesses owners’ biggest concerns for the new year include rising costs and not being able to pay bills, according to a survey of over 600 small business owners by Simply Business.
Read on to find out how small businesses and the self-employed are feeling at the start of 2023 after a challenging few years.
Over four in five (81 per cent) small business owners are worried about how the cost of living crisis is affecting their business.
Not only are SME owners having to contend with rising costs and higher energy bills, they’re also dealing with the knock-on effects these issues are having on consumers.
Small business owner Antonia Sanchez-Toomey, who runs a high street shop in Enfield, London, said the cost of living crisis was the driver behind a downturn in sales in 2022.
She said her business, Tailor Made Living, a lifestyle store specialising in homeware, gifting and fashion, is in effect non-essential retail.
“The instability we are experiencing along with inflation at record highs means that consumers are understandably cutting back and afraid to spend,” she said.
She added that customers have expressed their fear of not being able to pay their bills and this has stopped them from buying non-essential items.
Small business owners have revealed their top concerns and challenges for the new year, many of which are linked to ongoing uncertainty and the cost of living crisis.
A combination of these concerns have forced Antonia to cut back staff shifts and reduce opening hours.
She said: “I have stripped all non-essential costs out of our business. I am also selling a much smaller range of goods.”
The cost of living crisis follows the Covid-19 pandemic, which means many small businesses are still in recovery mode.
Our SME Insights report revealed that over two years on from the start of the pandemic, one in six small businesses didn’t think they’d ever financially recover from the impact of Covid-19.
Despite this, Antonia took some positives from 2020 and 2021:
“We grew our business during the pandemic by making changes and increasing our retail offering both online and in-store,” she said.
However, the long-term effects of the pandemic combined with the cost of living crisis and reduced festive trading means many small businesses aren’t feeling optimistic about 2023:
Antonia added: “We're entering 2023 in poor shape, our turnover is down approximately 35 per cent year-on-year, and ultimately we could be contemplating closure.”
Alan Thomas, UK CEO at Simply Business, commented: “The self-employed are feeling the pressure of the current economic climate more than most, with some small businesses not receiving the much-needed boost during the festive trading period.
“Small business owners are worried about the impact the cost of living crisis will have on their business. This is having a clear impact on consumer purchasing behaviour, which is another blow. SME owners are inevitably feeling the squeeze as they struggle to pass on rising costs to their customers.
“The new year is an opportunity for a fresh start but without support, at both governmental level and from hard-working consumers willing to shop locally, there is concern that 2023 will be even tougher.
“We must support small businesses all year round, and there’s no better time to start as you mean to go on than January.”
What are your major concerns at the start of 2023? Let us know in the comments below.
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Conor Shilling is a Copywriter at Simply Business with over two years’ experience in the insurance industry. A trained journalist, Conor has worked as a professional writer for 10 years. His previous experience includes writing for several leading online property trade publications. Conor specialises in the buy-to-let market, landlords, and small business finance.
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