UK Small Businesses on a Fuel‑Fueled Survival Sprint
In a recent round‑up of more than a thousand UK SMEs, the SME Insights Report from the little‑known yet mighty aviation of insurance, Simply Business, painted a picture of a business landscape that looks a bit like a game of Monopoly, except all the houses are literally burning hot.
What’s Heating Them Up?
- Fuel and energy costs: Biggest threat – 36% of owners say it’s the top danger on their radar.
- Tax & national insurance hikes: also a huge worry – 36% voice it as the leading concern.
When it came to the big picture, 70% of representatives confessed that rising costs across the board are the most pressing challenge. After all, if your utility bill keeps climbing faster than a Nerf gun on a jetpack, what’s a small business to do?
How These Poor Climbers Plan to Stay Afloat
- Half of them (49%) are gearing up to bump up prices to keep their balances buoyant.
- Pulled ahead in the pricing race: 21% will hike by 6‑10%.
- For the dramatic few (7%) who are contemplating a 20% increase – that’s a price jump you’d think of in a sci‑fi novel!
Directing the Government Hotline
- 59% tug at the government’s hand, demanding a review or drop of the energy price cap – because, although it does not directly bite them, the ripple effects are pumped right into their purse.
- 21% want a backup plan for the VAT cut, either a revisit or extension.
- Rolling out the red carpet for 12% who push for tweaks to national insurance cutbacks.
Why Does It Matter?
Energy price caps may be a remote “non‑business” measure, but for many small operators the energy bill surge is still a bitter pill to swallow. Add that to rising raw‑material costs or wages, and the cash flow balance turns into a tightrope over a bear pit.
In the Food, Drink & Retail Sector
When you drop the purchasing power of the average household – because everyone’s tightening the purse strings on coffee, meals, and excess apparel – the industries that depend on casual foot traffic feel the heat even sooner. These sectors are sleeping on the brink of the post‑pandemic recovery break, with their revenues slumped like a mattress on an empty bed.
So, the verdict: these SMEs are out here pressing the hoses for affordable energy, keeping their prices from skyrocketing in a hyper‑inflationary culture, and demanding a soft hand from the government to help keep the food on the table.
Wider threats to SME survival
What the Numbers Say About Small Business Survival
It turns out that many small firms are facing a roller‑coaster of challenges, and the data paints a pretty vivid picture.
Top Threats in 2022
- Rising fuel and energy costs – 54% of SMEs feel the squeeze.
- Tax and national insurance hikes – 36% wage‑hopers are worried.
- Lack of funds or access to credit – 22% could see their doors shut this year.
- Marketing & finding customers – 26% are struggling to keep the sales flowing.
- Recovering from pandemic losses – 18% are still reeling from Covid damage.
Financial Blow‑Up
Astoundingly, 87% of small business owners lost an average of £20,981 over the past two years. That’s money that was once in their purses, now in the ledger of hardship.
Covid‑19’s Total Cost
The pandemic hasn’t just been a headline; its ripple effects have cost the economy a staggering £109.6 billion. And, shockingly, 16% of owners think they’ll never fully recover.
Why It Matters
These numbers are more than statistics; they’re a clarion call. If we want small businesses to thrive, we need fresh funding, cheaper energy, and maybe a dash of marketing magic.
Green shoots of confidence
Big News for Small Biz: Tumble or Triumph?
Picture this: three out of every five small‑business owners are betting the economy’s about to take a nosedive in the next half‑year. Yet, surprisingly, most still feel their ventures are ready to weather the chaos.
The Flip‑Side of the Pandemic Pivot
- Back in September 2020, only 17% of owners feared a lockdown would kill their businesses.
- Fast forward nearly two years and a third (34%) says they’re more optimistic than a year ago.
- In 2022, a solid 71% were downright confident that their prospects were on fire.
So, what’s brewing behind the numbers?
Professor Portes Weighs In
Jonathan Portes, economics whiz at King’s College London, sums it up: “When the going gets tough, the smart and the cautious usually hike fares, trim costs, and put pause on expansion. That means no new hires and hoping the market plays nice in the next twelve months.”
He adds a twist – consumer confidence is the real gold‑mine. “If inflation eases and real incomes bounce back, people will start spending again, and that’s the sweet spot for all businesses.”
The Government’s Tug‑of‑War
- Fuel and energy are the biggest headache, largely out of the UK’s hands – think global market forces.
- Bree z, the pound’s slump, plus the energy market cap, all play a part in driving up prices.
- While the PM pushes a “high wage, high productivity” mantra, many workers see a steep drop in real wages— a double‑edged sword for confidence.
Portes believes the UK needs long‑term, clear playbook for the economy, or it’s just a lot of “let’s keep going till the end.”
Alan Thomas on the Front Lines
Alan Thomas, UK CEO at Simply Business, echoes the stress: “Our small‑biz crew is under siege—fuel costs, energy hikes, and the lingering pandemic drama.”
He highlights what owners want most: a review or cut of the energy price cap (which currently doesn’t apply to businesses). As energy bills climb, households are trimming non‑essential spending, causing a domino effect that hurts SMEs at a time when they’re already strapped.
Thomas warns: recession’s on the horizon, with a major risk for sole traders and micro‑businesses. The vibe is tense: one in six feels they’ll never bounce back financially after the pandemic. That pushes two‑fifths of owners to seek long‑lasting fiscal support from the government.
SMEs: The Heartbeat of the Nation
When you look at the numbers, 99% of all UK businesses are small firms, pumping trillions of pounds into the economy every year. They’re at the community core, and while many remain upbeat, the reality is that they’re navigating steep costs and still need the government’s help.
Our Take: Hang Tight, But Get the Grub!
Small‑business owners are juggling attempts to sustain growth, cut new hires, and keep an eye on consumer spending— all while trying to keep their savings in check. As the economic storm brews, it’s time for policy that lifts these entrepreneurs out of the fire, giving them a solid, long‑term foundation.
