Business owners call for urgent government support in the Chancellor’s pre-election budget on March 6th
A recent survey conducted by Novuna Business Cash Flow, encompassing 500 small and medium-sized enterprises (SMEs), has revealed a stark reality: 31% of business owners anticipate the potential closure of their businesses by the end of 2024.
This revelation underscores the significance of the upcoming Spring budget, positioning it as potentially one of the most critical in recent memory.
The prospect of numerous businesses facing closure is sobering, magnified by a recent ONS report, which indicated that only 3% of businesses temporarily halted trading in February 2024, with a mere 2% permanently shutting down.
Increase in Utility Bills Key Contributor to Profitability Drop, Report 32% of Businesses
The findings also highlighted the challenges leading to potential business closures. Since the last budget announcement in November 2023, 46% of businesses reported a decline in demand for their products or services as the chief cause of reduced profitability. Following closely, 32% of businesses identified increased utility costs as a significant burden, while 28% are grappling with cash flow pressures.
25% of Business Owners Likely to Make Redundancies by End of 2024
Despite these challenges, there remains a resilient spirit among businesses, with 62% likely to implement cost-cutting measures to sustain their operations. However, such strategies may necessitate significant restructuring, including redundancies, which 25% of SMEs anticipate will be necessary by year-end.
Half of SMEs Believe Upcoming Budget Will Have No Impact on Survival
Yet, confidence in the government’s ability to address these concerns through the upcoming budget is notably low, with 47% of surveyed businesses expressing scepticism, believing that the government’s plans will have no impact on their current predicaments.
With a substantial portion of the business community at risk, the government’s fiscal policies in the upcoming budget will not only shape the economic landscape but also signal its commitment to supporting the backbone of the economy. The question lingers: will the 2024 Spring budget offer the much-needed support to SMEs, or will it fall short of addressing the critical challenges they face?
John Atkinson, Head of Commercial and Strategy at Novuna Business Cash Flow, commented on the recent survey findings, “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. 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.”
