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Small Businesses Suffer From High Inflation

Small Businesses Suffer From High Inflation

A recent report has revealed that small businesses are being severely hit by the high levels of inflation.

Following a report by small business bank, Aldermore, small businesses are to be the hardest hit by inflation dueto the fact that they lack the influence of larger organisations.

The report suggested that small businesses are growing increasingly more worried about their margins gettingsqueezed as the price they pay for goods rises without them being able to pass on those increases to their customers.

The survey revealed that around 80% of small business owners reported that they were concerned that theirsupplier would force above-inflation costs on them. In spite of this, only 45% felt that they would beable to increase their own prices, driving up business costs and driving down profitability.

The Chief Executive of Aldermore bank, Philip Monks, stated that small businesses are apprehensive that theirnegotiating clout with both suppliers and customers will result in their firm coming off worst due to the current level of inflation.

Mr Monks added:

“Big businesses with dominant market shares are going to find it easier to pass on price increases to their customers and wring concessions out of their smaller suppliers. Unfortunately many small businesses don’t have that kind of negotiating power. Few businesses like inflation but small businesses probably least of all.”

Whilst this news hardly comes as a surprise it is certainly a sure indication that neither the Bank of Englandor the Government are doing enough to help British small businesses. With the Government and Monetary Policy Committee (MPC) keeping interest rates low, VAT high and restricting lending I’m not sure what else they coulddo to make the situation much worse…

Image: renjith krishnan / FreeDigitalPhotos.net

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