Business owners have seen an increase in two thirds of their bills and essential business expenses in the past 12 months even before historic energy bill rises appear according to a new survey.
The research and findings were commissioned by BusinessRescueExpert, one of the top independent insolvency practices in the UK, showed worsening economic conditions across every industrial sector and area of the country.
Four out of five of the 500 directors, CEOs or business owners who responded said that along with their energy bills increasing several other essential charges have risen during the previous year.
Fuel and transportation costs had risen for three quarters of respondents while 68% had also seen increases in the costs of raw materials, deliveries and suppliers costs in 2021/2022.
Over half saw their water rates increasing, while 45% said their staffing costs had gone up including wages and National Insurance Contributions.
The only area that saw an overall decrease was spending on advertising and marketing which is discretionary and done by the business themselves.
Chris Horner, Insolvency Director with BusinessRescueExpert, said the survey is a valuable snapshot of this moment when businesses are expecting to experience a large rise in energy prices and other bills but before support measures from a new Prime Minister are announced and implemented.
He said: “The past two years have seen unprecedented trading conditions for directors and business owners that were forced on them through no fault of their own.
“Now Covid-19 appears to be behind us and it should be a time to recover and recuperate, instead most of us are looking at unprecedented rises in essential energy bills unless there is some drastic intervention from the new administration.
“But even if energy bills happen to be frozen, we can see that lots of other essential costs have also risen for companies making their job of making a profit and a positive contribution to the economy just as difficult as it was during the pandemic years, if not more because there is currently no additional support measures to help them.
“We’ve been looking at the troubles facing pubs and restaurants recently and as our survey shows, businesses are having to deal with exactly the same issues no matter what industry they’re in or no matter where in the country they’re based.
“One silver lining to this particular cloud is that similar solutions will work just as effectively for a sole trader in Southampton as they would for a Marketing agency in Sunderland or a newsagent in Strathclyde.
“The first thing they should do is get some advice from an insolvency professional which is usually free for an initial consultation.
“Depending on the individual circumstances facing each a business, a range of options exist to help them rescue and restructure including administration, CVAs or insolvency moratoriums.
“Alternatively closure might be the more logical and preferable route forward for them and solutions such as creditors voluntary liquidation (CVL) or members voluntary liquidation (MVL) could produce a better result for them both professionally and personally.
“Anybody looking at the research and nodding or recognising similar patterns in their business should use this period before big decisions are being announced to get in touch and find out what they can do to help themselves and their company today rather than keeping their fingers crossed.”
Methodology
A total of 500 business owners, directors, CEOs and CFOs were surveyed for their views and experience on the cost of doing business in 2022.
The survey was weighted to achieve roughly comparable responses based on company size, geographic location and industrial sector to give as broad as possible a snapshot of how companies are managing their expenditure ahead of higher predicted bills and charges coming in Q4 2022 and all of 2023.