Cost-of-living crisis biggest threat to survival of UK SMEs, warns PayPal

More than three quarters – 78 per cent – of small businesses in the UK believe that the cost-of-living crisis is the biggest threat to their company due to lack of consumer spending and fuel price increases, according to research by PayPal.

The study, which surveyed 1,000 small business owners across the country, found that a further two thirds of Britain’s small business owners say the last two years have been the most challenging since they launched. A further 47 per cent said they fear that the next 12 months will be even more difficult.

The online payments business said that to keep their business a float many SME owners are working weekends, going six months without a holiday, or working seven days a week on a regular basis.

Other challenges for small businesses include: maintaining a steady cash flow – 29 per cent; managing their own mental health – 18 per cent; and coping with the increase in cost of raw materials – 17 per cent.

More than a quarter of SME owners – 27 per cent – say they are not sure they will be in businesses in the next year.

“Financial woes and stress can have a negative impact on health and wellness,” said Ben Ramsden, head of small and medium enterprise (SME) at PayPal. “In tough times, staying on top of their finance wellness is a vital tool for small business owners.

“It needs to be a priority to minimise the personal impact of running a business, which can be an isolating and challenging experience for entrepreneurs.”

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