The SME Outlook Report 2022, conducted by UK-based digital business lender Fleximize, has revealed that most UK SME owners are confident about the future and consider themselves financially resilient - despite confirming they will likely be looking to find ways to cut existing business costs, revising pricing and consider lending options.
From those surveyed, 54% of SMEs confirmed they would be looking to make cuts within their business, with renegotiation with suppliers the most common approach, followed closely by making cuts in technology/software and reducing production expenditure.
With rising costs starting to put the squeeze on businesses, increasing prices has become an inevitability, with 92% of SMEs reporting that they will pass on costs to the customers - with a 1 to 10% increment being the most likely increase in pricing change.
To accommodate cash flow concerns, 64% of businesses were considering borrowing money to maintain steady levels, expand their business or simply survive the recession. Given that running out of cash is the main reason for business failure, there is no surprise that SMEs are considering taking this option in order to maintain a healthy cash flow reserve.
Not only is the cost-of-living crisis affecting consumers across the country, but it is also proving to be the latest challenge for businesses. The severe hike in energy prices remains the biggest threat to business owners, with 54% agreeing that the cost will put a tighter squeeze on their cash flow. Increasing staff wages are also a major concern for business owners, who are likely feeling the pressure to increase staffing costs in line with inflation levels.
Dealing with mental health issues has been an important workplace topic in recent years. Despite more resources and access being readily available, 36% of SME owners don’t feel they have access to mental health support.
However, 57% of SME owners felt their mental health was positively impacted by running a business and 88% remain optimistic about the future, despite the gloomy outlook and setbacks they expect to encounter over the coming months.
Peter Tuvey, Chief Executive Officer at Fleximize, commented: “Given that the UK is currently in a recession and a cost-of-living crisis, it’s positive to see that SME outlook remains optimistic. However, despite their optimism, SMEs are acutely aware that they will have to take steps to continue to thrive within the current economic climate, and more support will be needed from private and public organisations across the country.”