The latest SME Confidence Tracker, which surveys over 1,000 of the UK’s small and medium sized businesses (SMEs) on a quarterly basis, shows more than a fifth (22 per cent) of small businesses say rising costs is their biggest concern this year. The proportion of firms expressing such fears has doubled in the past 12 months, with manufacturing businesses feeling particularly worried about rising costs.
Increase in competition and late payments are also cited as key challenges for SMEs in 2017.
Rising costs, fuelled by inflation, and the decrease in the value of the pound has proved to be a double edged sword for many businesses.
"The manufacturing industry has recently grown at the fastest rate for 25 years, fuelled by an uplift in exports due to the pound’s depreciation, but manufacturers that are reliant on importing goods and selling solely in the UK will see margins being significantly eroded," the report reads.
"These businesses are facing the challenge of maintaining profitability while remaining price competitive. This equation is causing a headache for many businesses and we are seeing many SMEs start to tighten their belts and pull back investment."
A lack of confidence in the UK economy as a result of the current economic environment has left 28 per cent of business owners holding off on investing in their businesses, as they take a more cautious approach ahead of Brexit.
Whilst the future remains largely uncertain for UK SMEs, businesses must ensure they have the right structures in place to respond quickly to the changing market conditions.
Our SME business experts at Beavis Morgan are able to guide you on your strategy, help you navigate the challenges that lie ahead, and assist in making those all-important business decisions that will have the greatest impact on future success.
Contact Steve Govey or your usual Beavis Morgan Partner for further information about how we can assist you and your SME business.