A third (33 per cent) of business owners say the cost of living crisis is hitting them hard – with 15 per cent admitting their business is at risk and they may have to shut it down.
New independent research conducted on behalf of mortgage brokers Boon Brokers questioned over 300 business owners on how the cost of living crisis is impacting on their business as well as their personal finances.
Almost one half of those questioned (44 per cent) said they would have no choice but to pass price rises on to customers in order to stay in business. One in four (27 per cent) are paying themselves less of a wage to mitigate rising costs.
On top of the 15 per cent considering closing their business permanently, a further six per cent are thinking about downsizing their business to help reduce the risk. Seven per cent think they may close their bricks and mortar premises to go purely online, savings costs.
But according to the Boon Brokers’ research, it’s not only businesses which are in jeopardy. One in seven business owners (14 per cent) say their home is at risk if their business fails, with 11 per cent already having missed a mortgage payment in the last year. When compared to the general population, double the number of business owners are worried about losing their homes compared to non-business owners.
One in 10 (11 per cent) have started using a credit card more frequently to make ends meet. In fact, 96 per cent of business owners admitted they are reducing their personal spending to save money.
Gerard Boon, managing partner at Boon Brokers, said, “These are very worrying statistics. The cost of living crisis is obviously impacting everyone, but business owners are feeling the pinch from both a business and a personal perspective.
“Many business owners admitted they were taking home less of a wage and are worried about the roof over their head. One in seven (14 per cent) told us they find it hard to secure a mortgage, which can often leave people stuck on expensive Standard Variable Rate deals, unable to switch.
“We’d always recommend business owners use a specialist whole of market and fee-free broker to help them secure the best possible mortgage. Doing so can save large amounts of money and help keep credit scores positive – both of which are going to be vital to weather the storm ahead.”