Rising operational costs are creating a challenging outlook for small businesses across the UK.

 

The Federation of Small Businesses (FSB) has issued a stark warning ahead of April’s looming cost increases. Rising energy bills, higher business rates, increased employment costs and changes to Statutory Sick Pay are all set to hit at once, creating a significant financial strain for the UK’s 5.7 million small businesses and self-employed.

 

Growing fears of contraction

 

According to new FSB research, more than a third (35%) of small businesses plan to close, downsize or contract over the next year. The outlook is even bleaker in key consumer-facing sectors:

 

• 41% in wholesale and retail

• 45% in accommodation and food services

More firms now report falling revenues than rising ones. As a result, 35% expect to shrink over the coming year, compared with just 21% who anticipate growth.

 

At Credit Assist, we understand that when revenues fall and costs rise simultaneously, payment performance can deteriorate, impacting businesses of every size. Our credit reports deliver a full view of the business in the context of industry sector, track media events, alert you of the moment negative conditions are evident, but also allow you to understand aging receivables trends.