The majority of small business owners expect the cost of running their companies to rise significantly over the coming year.
Research by Bank of Scotland Business has revealed that most entrepreneurs expect to fork out more due to rising interest rates, rent, rates of tax, property prices, supply and salary costs.
Of those expecting higher costs, more than one in 10 predicted an increase of more than 10%, almost a third anticipated a rise of between 5 and 10%, whereas four in 10 expected an increase of less than 5%.
Three-quarters of small business owners thought that prices of supplies and raw materials would rise in 2008, compared to just 3% who believed this would fall.
“Small business owners are acutely aware of the impact that additional fixed costs can have on the bottom line, and the majority will have seen many of these costs increase exponentially over the past few years,” said Ivan Matviak, head of Bank of Scotland Business Banking.
“Against a background of continued market uncertainty, the majority of these entrepreneurs remain unconvinced by the scare stories and foresee further increases in prices and rates,” he added.
However, the research found that 22% small business owners expected interest rates to decrease, while one in five predicted a fall in commercial property prices.
© Crimson Business Ltd. 2008
