Around 630,000 small businesses at risk of going bust – research
Around 630,000 small and microbusinesses are at risk of going bust in the face of rocketing costs and pressures on consumers, according to new research.
Data analysis of 2.3 million British microbusinesses – which are typically firms with fewer than 10 employees – highlighted growing pressure among small businesses due to rocketing costs, such as increased energy bills.
The Venture Forward report, produced by GoDaddy, indicated that the potential collapse of these companies would be a roughly £12 billion blow to the economy.
It comes ahead of a key Spring Budget for the Prime Minister and Chancellor Jeremy Hunt.
However, the research found that fewer than one in five (19%) entrepreneurs said they believe that Rishi Sunk “is acting in the best interests of small and microbusinesses”.
More than three quarters (77%) of entrepreneurs said they believe the cost-of-living crisis is the greatest challenge they have faced, with many highlighting the impact of higher energy bills.
When asked how MPs can help microbusinesses, the most common response was to offer tax incentives, with around 42%.
Business owners also called for technical assistance for business development and help with digital strategy.
Chris and Sarah Fryer, from Newcastle, who run vegan pie business Magpye, said: “As a bakery we use a lot of energy, so the rising cost of gas and electricity has dramatically increased our overheads.
“We are concerned about the energy relief scheme coming to an end in April, and would like to see the Government launch targeted help for energy-intensive businesses like ours.”
Andrew Gradon, head of GoDaddy UK & Ireland, said: “Venture Forward demonstrates the enormous contributions made by Britain’s microbusinesses.
“They have the power to add billions to the economy, while providing jobs and opportunity in their local communities.
“But the research also reveals the potentially disastrous consequences that the cost-of-living crisis could have on them.
“With more than 600,000 microbusinesses saying that they feel at risk of going under this year, it is crucial that they are given adequate support to help negate the rising cost of doing business.”