We have all seen the devastating images from Ukraine on our TV screens and the economic impact is already being felt closer to home. With growing uncertainty to the long-term economic effects of the conflict, the small business community within the UK is increasingly concerned about potential consequences on business growth. Worries surrounding disruption to supply chain, managing growth and the economic uncertainty of rising prices with particular regard to energy, are coming to the forefront of small business owners’ minds.
The outbreak of war in Ukraine has had a significant impact on UK small business owner confidence. Nationally, 78% of small business owners say they have worries that keep them awake at night ‘ fears over conflict have cast aside small business concerns over Covid, Brexit and red tape which have plagued businesses for the past few years.
The top three concerns for small business owners this quarter have all related to unfolding events in Eastern Europe. A quarter of small businesses were worried about the prospect of the Ukraine crisis turning into a European war. Alongside this, there is worries over general market volatility and the impact of the Ukraine crisis on soaring fuel prices and cost of living hikes. Some analysts are already predicting the cost of the war for the average British household to total just under £1,300 in 20221, with Novuna Business Finance research suggesting that the average small business could only afford a £147 monthly rise in costs before they hurt financially.
The research also suggests small businesses foresee disruptive issues they will need to manage in the months ahead. There was cause for concern for some small business leaders with retaining business (19%), whilst others have been predicting headaches with recruitment (16%) and managing company’s cashflow (15%). Other finance anxieties also featured heavily amongst concerns, from tax and interest rates, bad debts and business rates. Some small business leaders have even been apprehensive about considering better financial options for their companies.
Despite both heavily occupying business owners’ minds over the past few years, Covid and Brexit are no longer at the forefront of today’s concerns, with only 13% now worried about the economic impact of Brexit on their business, as well as the long-term effect of Covid – and just 11% are now concerned about the public health impact of Covid on business grow. Other issues that were causing less distress included red tape and excessive regulation, employee skill gaps and business rates – areas that have historically racked the small business community with fear in previous years.
Even with these concerns, the UK’s small business community remain optimistic about future growth. Since the outbreak of the war in Ukraine, 50% of business leaders still predict growth for the next three months. At Novuna Business Finance we are standing with small businesses at this time, helping enterprises secure finance for growth for the particular businesses needs as well as providing supportive tools to help them reforecast plans to adapt to changes in the current fast changing economic landscape.
1£1,259, as referenced https://www.mirror.co.uk/money/russia-ukraine-war-set-cost-26431556