With rising inflation predicted by the Bank of England, and the threat of rising interest rates this year, nearly three quarters of small business owners (71%) cited inflation as their biggest concern regarding the economy going into 2022.
As energy, fuel and raw material prices rise, almost half of small business owners (46%) surveyed named increased running costs as a main concern for their business going into 2022.
And with the dual impact of Brexit and the pandemic disrupting global trade routes in the past year, a quarter of small business owners also expressed concern about how supply chain issues might affect their business.
The threat of further restrictions remains a worry for small businesses given the tough trading conditions, with 66% of small business owners citing additional Covid-19 measures as a key concern going into the new year.
Small business owners’ attitudes to hiring
As concerns mount over the future of the economy and its effect on their business, four in five small business owners say that they do not expect to hire new employees this year, with only one in ten (9%) predicting they will hire over the next 12 months, despite record vacancies across the economy.
Optimism among small business owners remains low, with almost a third (30%) predicting that they will be worse off by the end of 2022. Alongside this low optimism, only 28% of small businesses expect 2022 turnover to grow this year, and one in five (19%) expect turnover to shrink.
Harp Gill, Milton Keynes based owner of mobile catering business, The Rub, said:
“As a mobile catering business, we have been hit hard by the pandemic over the past two years. COVID restrictions, and concerns over the Omicron variant over Christmas, have led to a string of cancellations. Going into the New Year, whilst no new restrictions are imminent, we have been hit by short term worries surrounding inflation and rising business costs. Over the last few months, supply chain issues and rising costs have meant we have had to remove certain meats from our menus including beef and lamb. We hope that as people see the back of the pandemic and get out to celebrate their lives, we will return to normality.”
Seema Desai, iwoca’s Chief Operating Officer, added:
“These results show that small business owners are concerned about rising inflation and the subsequent knock-on effect this will bring. Access to finance can help small business owners to make the most of growth opportunities, and that’s why it’s important that lenders like iwoca continue to support small businesses so they can fulfill their full potential.”
|Top 3 concerns business owners have about their businesses in 2022|
|Increased business running costs||46%|
|Supply chain issues||25%|
|Top 3 concerns business owners have about the economy in 2022|
|COVID-19 restrictions returning||66%|