Almost half of all small business owners in the UK (49 per cent) are set to increase their prices this year as they battle rising costs, reveals research. One in five intend to raise prices by 6-10 per cent while almost one in 10 (7 per cent) are considering implementing an increase of as much as 20 per cent.
The findings are from The SME Insights Report, released by insurance provider Simply Business, which polled 1,000 small business owners around the UK on their response to the current economic crisis.
Elsewhere, it finds that expansion plans are also on hold for many SMEs. Almost half (48 per cent) say they’re unlikely to hire any additional employees while two in five (40 per cent) are delaying opening new or additional premises.
Three in five (62 per cent) believe that the economy is set to worsen over the next six months, but despite this, remain confident in their business’ ability to weather the storm. The majority of those polled (71 per cent) say that they feel optimistic about their business’s prospects over the next six months.
Commenting on this new research, Jonathan Portes, professor of economics and public policy at King’s College London, says: “Small businesses in the UK have had to cope with overlapping economic shocks over the past three years – the pandemic, Brexit, and now the cost-of-living crisis.
“What this study shows is that despite the general economic pessimism, most businesses remain resilient. Like consumers, they expect the UK economy to worsen significantly over the next year, but they remain reasonably confident about their own prospects in the face of rising cost pressures.
“UK businesses might remain resilient in the face of further economic turmoil, but they need and deserve a more coherent longer-term strategy for the UK economy.”
Alan Thomas, UK CEO at Simply Business, adds: “The temperature of the nation’s self-employed is absolutely clear in our latest research. For 70 per cent, rising costs – as many still battle the lasting effects of the pandemic – represent the single biggest risk to recovery.
“This has left many owners with little choice but to put survival tactics in place. Yet it’s encouraging to see that SME confidence is improving as we emerge from the pandemic.
“With almost six million SMEs in the UK – accounting for over 99 per cent of all businesses, 33 per cent of employment and 21 per cent of all turnover – it’s vital for all of us that they can weather this summer of uncertainty and beyond.”