1 in 3 Small Business owners fear closure this year

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Small Business owners fearing closure in 2024

Nearly one in three (31%) of small business owners anticipate the potential closure of their businesses by the end of 2024 according to research by Novuna Business Cash Flow.

Novuna says that the prospect of numerous businesses facing closure is sobering, a reality underscored by a recent ONS report, showing just 3% of businesses had temporarily halted trading in the month of February 2024, with only 2% having shut down permanently.

The findings also shed light on the challenges leading to potential business closures. Since the last budget announcement in November 2023, a notable 46% of businesses reported a decline in demand for their products or services as the chief cause of reduced profitability.

Navigating cash flow pressures

Closely following this, 32% of businesses are wrestling with the burden of increased utility costs, while 28% are navigating through cash flow pressures.

Despite these challenges, there remains a strong determination among businesses to persevere, with 62% of businesses likely to implement cost-cutting measures to sustain their operations.

Nevertheless, such strategies may lead to significant restructuring, including redundancies, which 25% of Small Business Owners anticipate will be necessary by the end of the calendar year.

However, the confidence in the government’s ability to address these concerns through the upcoming budget is notably low, with 47% of businesses surveyed expressing scepticism, believing that the government’s plans will have no impact on their current predicaments.

With a significant portion of the business community at risk, the government’s upcoming fiscal policies will not only shape the economic landscape but also signal its commitment to supporting the backbone of the economy.

The question remains: will the 2024 Spring budget offer the much-needed support to Small Business owners or will it fall short of addressing the critical challenges they face?

John Atkinson, Head of Commercial and Srategy at Novuna Business Cash Flow, commented said “This survey exposes significant concerns among business owners, particularly highlighting that 28% are grappling with cash flow pressures in these challenging economic times. It underscores the urgent need for a budget that truly addresses the needs of small and medium-sized enterprises.”

He continued “As vital pillars of our economy, known for their innovation, employment opportunities, and growth, their struggles emphasise the necessity for government policy to be closely aligned with their real-world needs. The forthcoming budget presents an invaluable chance for the government to show its commitment to supporting SMEs and, by extension, the broader economy.”

Small Business owners need to keep Cash Flow at maximum

Dealing with unpaid invoices and managing small business owners mental health are two key factors for any small business owner.  Cash flow is the lifeblood of any business, but it can often be challenging for small businesses to maintain consistent cash flow.

Unpaid invoices can cause major cash flow issues, creating a domino effect that impacts the ability to pay suppliers and employees, resulting in a negative impact on the overall success of the business.

In addition to managing finances, small business owners also face significant mental health challenges.

The constant pressure of running a business combined with uncertainties and financial stress can take a toll on mental wellbeing.

It is essential for small business owners to prioritize their mental health and seek support when needed.

 

 

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