Home Business News More than half of London business owners have increased prices in response to the rising cost of living

More than half of London business owners have increased prices in response to the rising cost of living

by LLB Finance Reporter
25th Aug 22 12:06 pm

Moneypenny has completed two separate surveys, one to gauge the confidence amongst business owners and senior decision-makers in their business and the other to explore the number of people considering launching their own company.

Firstly, business owners were asked what factors had recently caused them to worry about the future of their business.

The top three factors were that 56% found that the pandemic would cause them to worry over the future of their company, with 52% having concerns of the cost of living crisis and finally 39% have concerns over the fuel crisis.

Demographically, 72% of those worried about the cost of living crisis were female, other factors worrying business owners included the increase in energy costs (30%) and a decline in consumer spending (25%).

The survey also revealed the ways businesses are adapting to the financial crisis, 53% have already increased their prices whilst 31% stated they have left or sold their physical office, moving completely remote to avoid renting costs.

Regionally, 66% of Londoners have increased prices and half of those surveyed in the North East have resorted to taking out a business loan to cover the increase in costs.

When quizzed on their confidence in their business’s future, a total of 82% answered that they were confident, 32% were very confident and 50% were somewhat confident.

Sadly, the survey also revealed that 3% were not optimistic about their business’s future with 2% expressing they don’t believe their business will survive the next three years.

One question included in the survey was whether businesses had been forced to downsize as a result of financial strain. The results portrayed a clear trend with a higher amount of businesses letting people go throughout the years of the pandemic.

23% of businesses downsized two years ago, at the height of Covid, comparing this to the 5% of businesses who downsized four years ago, it is clear to see a jump in figures coinciding with the pandemic.

The second survey was really useful for exploring whether the appetite for launching a business remains despite the financial problems posed.

This survey revealed that despite all the potential risks currently worrying business owners, 37% of the general public had thought about starting their own business, with 67% of 16 to 18-year-olds considering getting on the entrepreneurial ladder early.

For the 37% who responded that they had previously considered beginning their own business, they were quizzed on the factors that have delayed or prevented this from taking place.

The top three factors were that 30% have concerns over the cost of starting a business, with 30% having confidence in their own ability and 27% believe running a business seems too difficult.

It was revealed that potential business owners lack the confidence to start, while the cost of living crisis proved problematic to these aspiring business owners.

Examining city-specific data, 44% of those from Edinburgh struggle with confidence while 34% of Londoners stated the cost of launching a business was a contributing factor.

Other factors include the rise in the cost of living (23%), the aftermath of Covid (18%) and the energy crisis (17%).

Despite these factors posing obstacles to potential business owners, 24% of those surveyed revealed they might start their business in the next 12 months. 11% were unsure but didn’t completely reject the idea of starting in the next year.

Lastly, the survey explored the most desirable industries for aspiring business owners by asking them to state the sector they would most like to launch their business within.

Looking at city-specific demographics, 18% of the city of Liverpool would prefer to launch their business in the retail, catering and leisure industry.

It was interesting to see the top three industries made up of three sectors heavily disrupted throughout the pandemic. The least desirable industries were the manufacturing and utilities industry (3%) and the legal sector (2%).

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