Small firms plea
Ministers must ‘get serious’ and tackle rising costs
Government needs to “get serious” about helping businesses struggling to make ends meet amid rising costs and a worsening late payments crisis, says the country’s small firms lobby.
Soaring inflation and energy bills together with a hike in national insurance and the minimum wage are adding to the pressures facing small businesses.
The number of small firms fell by 400,000 to 5.5 million during last year’s lockdowns and a new study suggests that a similar number – 440,000 – could be forced to close this year because of late payments alone.
The study by the Federation of Small Businesses shows that close to one in three (30%) has seen late payment of invoices increase over the last three months.
A further 8% are experiencing other forms of poor payment practice. Only 6% say that a change in payment terms has been agreed over that period.
As a result, approaching one in ten (8%) say late payment is now threatening the viability of their business.
More small firms now expect their performance to worsen over the coming three months than expect an improvement. Pessimism is especially pronounced in the retail and accommodation and food industries.
The vast majority of small businesses (78%) say costs are rising. The figure is at a seven-year high.
Inputs are most commonly cited as a primary cause of that increase, with half (49%) of those surveyed flagging it as a main driver of higher outgoings. Fuel (46%) and utilities (45%) were the second and third most highlighted primary causes of rising costs respectively. All figures are at their highest levels since Q4 2014.
Elsewhere, with full import checks and rules of origin requirements now in place for firms which do business in the EU, the bulk (74%) of small exporting firms report that international sales were flat or falling over the past quarter.