“I’m not sure my business will be here in 2023” – Survey reveals true cost of doing business in the South East

The cost of doing business in the South Coast has been painted as bleak by a new insolvency report.

“I’m not sure my business will be here in 2023:” “[With] constant rises in everything, how long can we continue to not pay ourselves over staff?”; “Everything is rising” were just some of the comments from business owners surveyed by independent insolvency practice BusinessRescueExpert on the cost of doing business in the South East in 2022.

According to the research, even before the recent increase in energy bills business owners in the South East have seen bills and essential business expenses increase in the past year.

Of the 15 different categories business owners were asked about, including corporation tax, VAT, business rates and utility bills, none had more than 10 per cent of responders saying it had decreased. ‘Capital purchases’ decreased for 8.33 per cent of those surveyed.

On the other hand, only two categories, ‘Bounce Back Loans’ and ‘CBILS or other loans’ have increased for less than 10 per cent of respondents, with 8.33 per cent and 9.52 per cent respectively.

This is compared to, unsurprisingly, energy bills, of which 90.48 per cent have seen an increase, and fuel/transportation, of which 89.29 per cent have seen an increase.

Energy bills were also cited as the cost business owners were most worried about meeting. Energy price was twenty points ahead of corporation tax the second most common concern. National insurance costs, on the other hand, is the bill business owners are least worried about.

The survey also found that, in the event of cash flow issues, business owners were most likely to go to their accountant for advice, followed by internet searches and websites.

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Chris Horner, Insolvency Director with BusinessRescueExpert, said the survey is a valuable snapshot of this moment: Just as businesses are expecting a large rise in energy prices but before support measures are announced and implemented.

He said: “The past two years have seen unprecedented trading conditions for directors and business owners that were forced on them through no fault of their own.

“Now Covid-19 appears to be behind us and it should be a time to recover and recuperate, instead most of us are looking at unprecedented rises in essential energy bills unless there is some drastic intervention from the new UK administration.

“But even if energy bills happen to be frozen, we can see that lots of other essential costs have also risen for companies making their job of making a profit and a positive contribution to the economy just as difficult as it was during the pandemic years, if not more so, because there is currently no additional support measures to help them.

“We’ve been looking at the troubles facing pubs and restaurants recently and as our survey shows, businesses are having to deal with exactly the same issues no matter what industry they’re in or no matter where in the country they’re based.

“One silver lining to this particular cloud is that similar solutions will work just as effectively for a sole trader in Southampton as they would for a marketing agency in Sunderland or a newsagent in Strathclyde.

“The first thing they should do is get some advice from an insolvency professional which is usually free for an initial consultation.

“Depending on the individual circumstances facing each a business, a range of options exist to help them rescue and restructure including administration, CVAs or insolvency moratoriums.

“Alternatively closure might be the more logical and preferable route forward for them and solutions such as creditors voluntary liquidation (CVL) or members voluntary liquidation (MVL) could produce a better result for them both professionally and personally.

“Anybody looking at the research and nodding or recognising similar patterns in their business should use this period before big decisions are being announced to get in touch and find out what they can do to help themselves and their company today rather than keeping their fingers crossed.”

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Featured image: iStock