The upcoming increasing costs due to the Health and Social Care Levy increase in National Insurance Contributions (NICs) and rise in minimum wage rates are set to impact small and medium sized businesses (SMEs), research has revealed.
The monthly SME Recovery Tracker, conducted by the Association of Chartered Certified Accountants (ACCA) and The Corporate Finance Network (CFN), asks accountants to comment on the financial health of their clients.
Unfortunately, UK SMEs may be facing a crisis as accountants in the survey reported that 21 per cent of SMEs may run out of money within the next 12 months.
This figure increases to 47 per cent for SMEs across Wales, whilst in Scotland the prediction rate stands at 7 per cent.
The financial strain of upcoming costs is also having a detrimental effect on individuals mental health, with 35 per cent of the accountants from the survey reporting that their clients are experiencing an elevated level of stress and anxiety.
How can your business deal with the upcoming pressure?
The upcoming cost increases in April may seem be painting a daunting picture for the future, however there are several ways that your business can prepare for the challenges ahead.
Whilst increasing prices is an option, it is important to ensure that you do this gradually and only if necessary, to not deter customers.
With the pandemic enforcing more flexible working arrangements, it may be worth considering whether the premises your business operates in is an essential cost, or whether downsizing is an option.
The Government has also launched the Help to Grow: Digital scheme to help businesses with the cost of technology to increase productivity.
If you require support with related matters, contact our experts today.