More than half of small and medium-sized businesses across Yorkshire and Humberside are facing increased operating costs, a survey has revealed.
And 62% of them say it is having an adverse effect on cash flow, according to findings from the the latest Close Brothers Business Barometer, a quarterly survey of UK SME owners and senior management from a range of sectors on economic and financial issues.
Of the 58% of firms hit by increased operating costs, 46% said that the cost of raw materials and stock is creating the greatest problem for them, while 29% say that rising energy bills are causing the most pressure on their cash flow.
Mike Randall, chief executive of Close Brothers Asset Finance, said: “Operating costs have increased significantly over the past few years and are arguably one of the most difficult things for small business owners to manage in the current 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.”
More than two-fifths of firms surveyed across Yorkshire and Humberside said that while their direct costs have increased, they feel unable to pass any of this on to their customers.
“This is a situation that is leading to increased pressure on already-tight margins and it is entirely possible that operational costs will continue to rise for the foreseeable future,” said Mr Randall.
“Our advice is that if you haven’t thought about your business finances for a while, then this is a good time to ensure your funding is structured to cope with this strain on cash flow.”