Tide, a Fintech providing banking services to small businesses, has issued a warning that the UK could be in store for a challenging business environment as one in five small business owners may not make it through the year.
According to a survey of 1000 small businesses, Tide revealed that approximately 70% of businesses had to increase hours, while a third relied on friends to keep them up and running. Rising prices are having a negative impact on businesses as they struggle to adjust.
Tide says that the West Midlands at 33.3% and the North East at 31.4% were the top regions where businesses were considering shutting but all areas are struggling
Tide reports that rising fuel and energy prices (57.2%) dominated worries for small businesses, with inflation (22.4%) second and supply chain issues (8.3%) third. Tide notes that currently the inflation rate is at 9.1% and the Bank of England has said it could go as high as 11% this year.
Additional points include:
- 71% of respondents said they have increased their own working hours
- 34.6% said they are asking family and friends to help out
- 28.1% have taken a job elsewhere to increase their income.
- 9.7% small businesses have been forced to cut staff.
Tide CEO Oliver Prill, issued the following statement:
“Small businesses are a pillar of the UK economy and clearly they are finding it extremely tough in the current macroeconomic climate. Tide’s research shows that the UK could face a mass closure of small businesses, as the cost-of-living crisis turns into a cost-of-doing-business crisis. We urge the UK government to help small businesses through the crisis e.g. by introducing VAT relief for all small businesses until 31 March 2023, the end of the full tax year. Small business owners are doing their best to keep their companies running, including getting help from their family and friends, but they need more support.”