Small businesses owners in Britain are feeling the brunt of the rising cost of living on their mental health and income, according to research from HSBC UK.
The British bank said 41 per cent of businesses reported rising inflation was the main threat to their company, followed closely by the decline in consumer spending and rising energy costs. Just over a quarter - 26 per cent - said cost-of-living worries had affected their mental well-being.
In addition, HSBC noted more than half of small business owners are reluctant to talk about such threats, not even with friends or family. More than two thirds had not approached their bank about the situation and 29 per cent had used their personal savings to prop up their businesses. More than half had opted to research solutions online, rather than talking to someone.
Behavioural psychologist Jo Hemmings said small business owners are facing a perfect storm.
“It’s not surprising that many are struggling with their personal well-being and it’s understandable that some feel reluctant to open up about the challenges ahead. But business owners shouldn’t see talking through their personal or professional concerns as any kind of admission of failure and research shows that internalising anxieties will not help.”
“They are not alone and I’d urge those feeling the pressure of running a small business at this difficult time to talk through their challenges with professionals who can provide practical help, including their bank”, she added.
Cost of living crisis in the UK — in pictures
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People demonstrate in central London against the rising cost of living. EPA -
Former British prime minister Boris Johnson said workers should accept a pay cut to avoid spiralling inflation. AFP -
Inflation in the UK hit an annual rate of 9.1 per cent in May. EPA -
The British government told workers they cannot expect pay rises to keep up with the increasing cost of living. EPA -
The Bank of England, which says it can do nothing to stop the sharp increase in prices, is raising rates at an unprecedented rate. AFP -
The UK was also brought to standstill by the biggest rail strike in 30 years this week, with 40,000 RMT union members walking out in a row over a below-inflation pay offer. PA -
The RMT picket line outside Bristol Temple Meads station. PA -
The cost of petrol continues to rise. AFP -
A protester demonstrates outside Downing Street. EPA -
Volunteers in Bradford, northern England, prepare food parcels at the Bradford Central Foodbank. More and more people are visiting the centre. AFP
Despite this, many small business owners remain optimistic. HSBC's survey found that 65 per cent of owners expect their businesses to survive the next six months, with more than one in three predicting a jump in profits next year.
The bank has a team that specialises in early warning signs and proactively contacts customers it believes are in financial difficulties. Those signs can include repayments falling into arrears and the lack of available funds to make commercial card payments.
“With the current economic environment creating business uncertainty, it’s fair to say that many small companies have had a rough ride these last few months”, Peter McIntyre, head of business banking at HSBC UK, said.
“Owners are at the helm, so it’s no surprise that navigating cost challenges is having an impact on their own personal well-being. The good news is that when customers engage with us early on they are more likely to avoid going into financial difficulty.”
