What is the top concern for small businesses going into 2022?

With rising inflation predicted by the Bank of England, and the threat of rising interest rates this year, nearly three quarters of small business owners (71%) cited inflation as their biggest concern regarding the economy going into 2022.

As energy, fuel and raw material prices rise, almost half of small business owners (46%) surveyed named increased running costs as a main concern in 2022.

And with the dual impact of Brexit and the pandemic disrupting global trade routes in the past year, a quarter of small business owners also expressed concern about how supply chain issues might affect their business.

The threat of further restrictions remains a worry for small businesses given the tough trading conditions, with 66% of small business owners citing additional Covid-19 measures as a key concern going into the new year.

As concerns mount over the future of the economy and its effect on their business, four in five small business owners say that they do not expect to hire new employees this year, with only one in ten (9%) predicting they will hire over the next 12 months, despite record vacancies across the economy.

Optimism among small business owners remains low, with almost a third (30%) predicting that they will be worse off by the end of 2022. Alongside this low optimism, only 28% of small businesses expect 2022 turnover to grow this year, and one in five (19%) expect turnover to shrink.

Seema Desai, iwoca’s chief operating officer, commented: “These results show that small business owners are concerned about rising inflation and the subsequent knock-on effect this will bring. Access to finance can help small business owners to make the most of growth opportunities, and that’s why it’s important that lenders like iwoca continue to support small businesses so they can fulfill their full potential.”