New figures from the Association of Practising Accountants (APA) reveal that 87% of small and medium-sized enterprise (SME) businesses are worried about their growth this year due to inflation.
As a member of the APA, Duncan & Toplis has supported this survey by gathering the views and experiences of business leaders, with key findings revealing that 64% of SMEs say rising energy costs are impeding their ability to deliver services efficiently.
The survey, which collected results from over 300 SME owners, also discovered that 43% of business owners thought that Brexit had either had a negative or very negative impact on their business, with 59% saying team recruitment and retention is now presenting more of a challenge than 12 months ago.
In fact, 62% of businesses taking part said their focus is on simply surviving or sustaining their business against 33% which are looking to grow over the next six months.
Despite these challenges, the findings also provided evidence that those businesses that have survived the pandemic are now more resilient and confident, with 81% reporting they’re in better shape for the future than before the pandemic.
82% of respondents were either very or somewhat confident that they would be able to access the finance they needed over the next six months, and 79% believe the UK government's response to COVID-19 has been either very or quite effective.
“Inflation is soaring at 6.1% year on year, and it’s expected to exceed 8% this summer. Meanwhile, the cost of oil and gas is skyrocketing and worker shortages and added shipping challenges are driving up costs elsewhere.
“It’s been a difficult time for businesses over the last two years, having already contended with COVID-19 and Brexit, and now the rapid inflation of costs occurring this year.
“The UK Government must be more pragmatic about our future trading relations with Europe, understanding that labour shortages along with a more challenging export environment, pose a real threat to recovery.
“These recent findings from APA’s report show the importance of being able to adopt a flexible approach to business policy - and I think this will be the key to a sustainable recovery.”
If you would like to discuss how inflation may affect your business, please contact our team today.