Recent economic news seems to have been an improvement on last year, with inflation and interest rates holding steady. Two recent surveys by Novuna Business Finance, however, show that small business owners are still having sleepless nights about their position — and many fear that they may have to close within the year.
Concerns Affecting Small Businesses
75% of small business owners have said that worries about their business are causing them sleepless nights. While this is slightly down from two years ago, it’s still a significant figure, and it varies considerably between sectors. Those whose concern levels were significantly above average included construction, hospitality and leisure, and real estate.
So what is it causing business owners particular concern? Market volatility seems to be the big one. This stands at 35% overall, but the figure is considerably higher for hospitality and retail. Similarly, concern about interest rates is 21%, but again this is a much bigger problem for the hospitality sector.
Cashflow and retaining business are also substantial worries. Brexit and the aftereffects of COVID seem to have faded, but these are still causing particular problems for retail, IT and hospitality.
Small Businesses Fearing Closure
Although figures show that only 2% of businesses closed down during February, with another 3% temporarily pausing trading, Novuna’s other survey suggests that around a third of small businesses are facing the very real fear of having to close during 2024.
The biggest cause of this, reported by nearly half the businesses questioned, is less demand for their products or services since the November 2023 budget. Other major concerns include the cost of utilities and, again, severe cashflow problems.
Nevertheless, there seems a strong determination to solve these problems, rather than letting themselves go under easily. 62% of businesses anticipated bringing in cost-cutting measures during this year — maybe including redundancies.
Are You Affected?
Joanna Morris, Head of Insight at Novuna Business Finance, points out that, “As the backbone of the economy, small business owners find themselves in a relentless battle against rising costs and unpredictable market conditions,” adding that it “serves as a crucial reminder of the resilience and adaptability required from small businesses to navigate these tumultuous times.”
It’s notable that cashflow is cited as a major challenge in both these surveys. Any business will struggle to keep going without a healthy cashflow, but this clearly isn’t easy at the moment. With the right credit control systems in place, though, you can at least ensure you’re getting the money that’s due to you.
If you’re having problems getting invoices paid, give me a call and find out how I can help you get on top of your cashflow and perhaps get a better night’s sleep.