Small businesses hit by high operating costs

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Almost two thirds of small and medium sized businesses across the North West are experiencing increased operating costs, and two-thirds of those say it’s having a negative impact on their cash flow.

The figures come from the Close Brothers Business Barometer, a quarterly survey of UK SME owners and senior management from a range of sectors on economic and financial issues.

Of those in the region who are impacted by increased operating costs, two-fifths state that rising energy bills are creating the greatest problem for them, while a third say that the cost of raw materials and stock is causing the most pressure on their cash flow.

CEO of Close Brothers Asset Finance, Mike Randall said: “Operating costs have increased significantly over the past few years, and are arguably one of the most difficult things for small business owners to manage in the current climate. We work with businesses across a range of sectors and we can see that they are all concerned about operating costs, which is unsurprising given the energy requirements, raw materials and machinery that many require.”

Almost a third (32 per cent) of firms surveyed say that while direct costs have increased, they feel unable to pass any of this on to their customers.

“This is a situation that is leading to increased pressure on already-tight margins and it is entirely possible that operational costs will continue to rise for the foreseeable future,” said Mr Randall.