Businesses list costs as one of main challenges

Setting up a business is not easy, but the costs associated with doing so are among the biggest challenges to overcome, according to new research.

Figures from Opus Energy show that 40% of SMEs believe that costs are their biggest issue that are likely to influence how they do business.

The study also highlights the importance of financing and lending options for businesses, especially as around 100,000 applications for finance are rejected annually.

Alongside staff costs, including wage and National Insurance Contributions, are operational costs including rent, taxes, business rates and utility bills.

However, the uncertain nature of the economic climate following the EU referendum has made it more difficult to access finance to offset some of these outlays.

The Bank of England has also suggested that business lending is expected to drop by 25% by 2019 when compared to levels from before the referendum vote.

However, small businesses can rely on the Small Business, Enterprise and Employment Act which sought to make lending easier.

A wide range of alternative finance options are also available to assist firms facing difficulty while options reviews may also reveal the best route to take. 

Businesses can also seek to reduce some of the pressure on their own finances by cutting costs if possible or by focusing on additional revenue streams.

Expenditure does not always need to be as high as it is, and businesses may find it is possible to reduce their outlays by focusing on specific areas of operations that can maximise returns.

Businesses could even opt for solvent restructuring to change their business in order to separate assets, take advantage of potential tax reliefs or alter its structure.

There are a wide range of options available to support businesses at any stage of their operations, and it’s important to consider the desired outcomes of any outlays before investing.

Spending finance to boost the profile of a business could be beneficial in the long term for example, while other more short‐term investments may not.

By Phil Smith


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