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 they have 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 – according to Novuna Business Finance.
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%), and the impact of the Ukraine crisis on soaring fuel prices and cost of living hikes (19%). Some analysts are already predicting the cost of the war for the average British household to total just under £1,300 in 2022, with Novuna Business Finance research suggesting that the average small business could only afford a £147 monthly rise in costs before they hurt financially.
As many small businesses re-emerge from the pandemic only to go into a new era of uncertainly, the research also suggests small businesses foresee disruptive issues they will need to manage in the months ahead. Nationally, 19% of small businesses were worried about retaining established business, 16% predicted headaches with recruitment and 15% were concerned about managing cashflow in uncertain times.
Despite both Covid and Brexit heavily occupying business owners’ minds over the past few years, the new research suggests that they are no longer at the forefront of today’s concerns, with only 13% now worried about the economic impact of both 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%).
Jo Morris, Head of Insight at Novuna Business Finance said, “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. At Novuna Business Finance we stand by small businesses at this time, helping established enterprises secure finance for growth and providing support tools to help them reforecast plans to adapt to changes in the economic landscape.”