Price increase, extension to business hours and energy savings top tactics to keep small firms afloat
Purbeck Personal Guarantee Insurance conducted the survey to understand the extent of the cost of living crisis on small UK businesses, as well as the measures they are taking to keep themselves afloat. The crisis runs deep, with 18% of small business owners or managers admitting to contemplating business closure in the past year. It’s sad news for the North East, where small firms were the most likely to report closure contemplation. However closure was not on the radar for any East Midland business, which gives at least some positivity to the small business world.
The most common method to prevent closure and tackle the crisis was to increase costs, which was followed by implementing energy saving measures. Near to a quarter reported changing their business hours, while 20% are looking for extra financial support either in the form of new investment or an extension of an overdraft limit. The full breakdown of measures is detailed below:
Increase prices 42%
Cut energy use 31%
Increase business hours 13%
Seek new investment 13%
Operate the business remotely 11%
Change business hours 10%
Reduce workspace 9%
Relocate 7%
Extend overdraft limit 7%
Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “Small business owners continue to show immense resilience and are taking sensible measures to manage costs as a matter of survival. However, our survey suggests there are clear differences in how businesses are coping in different regions of the UK, underlining the importance of the ‘Levelling Up’ agenda.
“Purbeck’s focus is on enabling small businesses in the regions most impacted, to access funding without risk to the business owners/directors. The key issue is that small businesses must not over-extend themselves financially given the rise in interest rates and risks of signing personal guarantees for business loans. If access to new funding is vital and investors are proving hard to find, then expert, independent advice from a professional such as a commercial finance broker is critical. This will help to ensure the right loan product is secured for the business’s needs.”