Ukraine crisis and rising fuel prices overtake Covid as top concern for small businesses
We have all seen the devasting images from Ukraine on our TV screens and the economic impact is already being felt at home. Small business owners are concerned about disruption to supply chain, managing growth during a new era of economic uncertainty and absorbing the impacting of rising prices, particularly with energy. That said, UK SME’s remain optimist about growth. Since the outbreak of the war, 50% of business leaders still predict growth for the next three months.
Overnight, the outbreak of war in Ukraine has had a significant impact on UK small business owner confidence. Nationally, 78% of small business owners say there are worries that keep them awake at night - and the feared implications of the Ukraine conflict have cast aside small business concerns over Covid, Brexit and red tape.
The top three concerns for small business owners all related to unfolding events in Eastern Europe and its economic impact in the UK.
- A quarter of small businesses were worried about the prospect of the Ukraine crisis turning into a European war (22%).
- Alongside this, there was concern over general market volatility (22%),
- The impact of the Ukraine crisis on soaring fuel prices and cost of living hikes (19%).
Top issues keeping small business owners awake at night
Prospect of the Ukraine crisis turning into a European war | 22% |
General economic volatility | 22% |
Impact of Ukraine crisis on fuel crisis and cost of living | 19% |
Retaining business | 19% |
Recruitment | 16% |
Managing cash flow | 15% |
Tax and interest rates | 14% |
The long-term economic impact of Covid on my business | 13% |
The impact of Brexit on my business | 13% |
The current public health impact of Covid on my business | 11% |
Bad debts | 11% |
The effects of unpredictable/ extreme weather | 10% |
Compliance and Regulations | 10% |
Employee skill gaps and shortages | 9% |
Borrowing and lending | 8% |
Business rates | 8% |
Considering better finance options | 7% |
Red tape (i.e., excessive bureaucracy and regulation) | 7% |
Not applicable - Nothing is keeping me awake at night | 22% |
Some analysts are already predicting the cost of the war for the average British household to total just under £1,300 in 2022[1], 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 new research also suggests Brexit and Covid are no longer at the forefront of today's concerns, with only 13% now worried about the economic impact of Brexit on their business - and just 11% concerned about the public health impact of Covid. Those issues that were of less concern included red tape and excessive regulation (7%), employee skill gaps (9%) and business rates (8%).
[1] £1,259, as referenced https://www.mirror.co.uk/money/russia-ukraine-war-set-cost-26431556