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SMEs See Operating Costs Rise

Many Also Feel Unable To Increase Prices


More than half of SME owners saw their operating costs increase during the final quarter of 2014, according to the latest Close Brothers Business Barometer.
The quarterly survey found that 58% of SMEs expect the increasing costs to have an impact on their cash flow in the new year, with nearly two-fifths saying rising energy bills are creating the biggest problems.
Meanwhile, just over a quarter say the cost of raw materials and stock is putting the most pressure on their cash flow.
However, more than a third of SMEs said that even if their direct costs increase, they are unlikely to pass on these costs to their customers via higher prices.
Mike Randall, Chief Executive Officer of Close Brothers, said operating costs are among the most difficult things for SMEs to manage in the current economic climate.
"We work with businesses across a range of sectors and we can see that they are all concerned about operating costs, which is unsurprising given the energy requirements, raw materials and machinery that many require," he said.

Expert Opinion
While much recent research has focused on the positives that many small businesses have seen across recent months, this study has put a spotlight on some of the pressures that they continue to face.

"It is vital that any SMEs which may be facing difficulties always seek advice on their planning and strategy for the coming months, with the ultimate aim of ensuring that they are continuing to meet key regulations and are able to improve their situation going forward."
Fergal Dowling, Partner

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