British small businesses are struggling to keep their heads above water, and many business owners are being forced to resort to their own savings to survive, a new survey has found.
Almost one in five of Britain’s small and medium-sized enterprises (SMEs) said they are missing paydays in a battle to make ends meet.
The survey of 1,000 SMEs was commissioned by the business arm of utility company npower, and conducted in February.
Against an increasingly competitive and uncertain economic backdrop, small businesses were found to be predominantly self-financing with nearly 60 per cent of companies claiming that they don't rely on anyone for financial support. Nearly 20 per cent added that they are using their personal savings to stay afloat.
“SMEs are super powering towns and cities across Britain, helping to determine the success and character of regions across the UK. However, it’s clear from our research that some of these businesses are relying entirely on themselves to succeed,” Richard Longbottom, acting head of sales and marketing at npower Business, said.
And many businesses don’t expect things to improve, especially with Brexit around the corner.
According to the survey, compared with last year, a quarter of the respondents are less confident about their business growth prospects for 2017, with 67 per cent of these attributing this to the UK’s vote to leave the EU.
Prime Minister Theresa May has indicated that when she triggers Article 50 – kickstarting the formal process of leaving the EU – on Wednesday, she intends to pursue a “hard Brexit”. This would prioritise immigration control over access to the European single market.
Research released by the Federation of Small Businesses (FSB) earlier this month revealed a trade deal with Europe is top of the list for small businesses post-Brexit.
The poll also found small businesses are concerned about tariffs imposed once the UK leaves the single market. A third of exporting firms say they would be deterred from trading with the EU if a tariff of between 2 per cent and 4 per cent was applied.
“The reality is that the EU single market is still a crucial market for smaller firms and cannot be undervalued. Compared with larger companies, small businesses typically work to tighter margins with limited resources, meaning changes to the trading landscape will hit them disproportionately hard,” Mike Cherry, FSB national chair, said.
“We call on the Government to ensure that a sensible phased implementation arrangement is put in place to avoid a cliff edge, once we have left the EU,” he added.
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