75% of small businesses forced to pass rising costs onto customers

By TBM Team

28 July 2022

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According to figures just released, small business owners are finding it difficult to control rising costs and are having to pass them along to their customers. Three-quarters of small business owners have reported increased prices to their consumers, according to the results of a Smart Energy GB poll.

However, the vast majority - 86% - are working to keep costs as low as possible in an effort to hold prices steady or limit additional rises in the face of The Cost of Living Crisis. This include keeping close tabs on their energy costs (33%), looking around for more affordable suppliers (33%), and halting hiring new employees (28%).

72% either have a smart metre or are thinking about acquiring one to better manage their energy spending in order to keep a closer check on the costs that are increasing.

Fuel, raw materials, gas and electricity bills were found to be the key escalating hidden costs putting pressure on the final price of their goods or services. Of those surveyed, 28% were unsure of the amount of their upcoming energy bill.

More than three quarters (77%) of those who have not yet raised prices believe they will have to do so over the next six months if the current trajectory continues. 61% of those who have not yet raised prices believe it is 'inevitable' that they will.

85% of those who have already had to do it described it as a 'last resort.' Despite the fact that many companies claim their clients have been understanding of the circumstance, more than half of them think they have lost some clients as a result of the steep increases in costs.

💡 We carried out some new research to understand how the rising cost of living is affecting small and medium enterprises in Britain.

Swipe to discover our findings & click below for more 🔗
— Smart meters (@SmartEnergyGB) July 26, 2022

Fflur Lawton from Smart Energy GB, said this about the results: “Small businesses are facing many of the same challenges and price hikes that consumers are. It’s inevitable that increased running costs will be passed on to customers in some instances. However, new research has found that many businesses are trying their best to minimise the impact of these price rises on their customers and are going to great lengths to keep their overheads as low as possible.”

"The study found small business owners estimate their outgoings have risen by 13% since the start of the year. For 35% of those polled, uncertainty about rising costs is the most challenging thing about running a business. Intensifying costs for the remainder of 2022 was a concern for 92%, with 78% believing rising costs could jeopardise their long-term business goals and ambitions."

"In fact, working long hours and significant world events – such as the pandemic – also ranked as leading challenges small businesses are facing. Looking ahead, nearly seven in 10 (69%) said plans are already being formulated so they can avoid increased prices for the remainder of this year and they are already looking at a number of ways to reduce their outgoings."

"Turning off appliances when not in use, reducing the amount of energy used and going paperless are the leading sustainable measures small business owners have taken to cut costs. More than one in four (27%) have slashed the amount they are travelling for meetings, and continued to embrace video calls."

“When you are focused on keeping a business running smoothly, anything that helps make the day-to-day challenges a bit easier can be a welcome relief. As smart meters securely send data directly to energy suppliers, businesses only ever pay for what they actually use, which can be a great help with cash flow. There’s also no need for business owners to do manual meter readings as they’re sent automatically, so getting a smart meter installed can be a great time saver too.”