THREE-quarters of Scottish small business owners are suffering sleepless nights over worries about the UK economy, according to a new survey.
They are also more likely than the UK average to be kept awake by anxiety over the impact of Brexit on their business (19% compared with a 12% UK average), recruiting staff (15% compared with a 9% UK average), and the effects of unpredictable or extreme weather (15% compared with a 6% UK average).
Chief among their concerns is market volatility, research by Novuna Business Finance found.
The proportion of businesses with worries about this reached 44% in the first quarter of 2024 – almost double the proportion from two years ago (26%), and far exceeding the UK average of 35% this quarter.
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Despite the latest forecast from the Office for Budget Responsibility (OBR) suggesting that inflation is set to fall below 2% in the next few months, the effects of rates peaking at 11.1% over the previous 18 months have continued to affect the outlook of small business owners.
The data showed that, along with general economic volatility, the proportion of small business owners kept awake by concerns over interest rates has peaked this year, rising from 24% last year to 32% this year. Again, this figure is significantly higher than that of the UK average (21%).
Perhaps unsurprisingly given these circumstances, the proportion of businesses struggling to manage their cash flow has risen in the last year from 15% to 23%, making it one of the top three concerns this year.
Joanna Morris at Novuna Business Finance said: “Small business owners in Scotland might be mildly relieved by the recent stabilisation of inflation rates, but it goes without saying that the long shadow cast by the previously high rates and market turmoil witnessed over the past 18 months has had a monumental effect on their outlook and operations.
“As the backbone of the economy, small business owners find themselves in a relentless battle against rising costs and unpredictable market conditions, making the task of forecasting and managing their financial futures for the long term nigh on impossible.
“Leaders are crying out for a period of steadiness, predictability, and above all, certainty. Yet, with three-quarters of business leaders admitting to sleepless nights currently, it’s clear they are not finding this stability.”
She added: “This data serves as a crucial reminder of the resilience and adaptability required from small businesses to navigate these tumultuous times.”
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