SMEs hit by higher operating costs

Date: 22nd September 2008

Nearly half of all small British businesses are suffering from higher operating costs due to the economic downturn.

Research by Orange SMS Business found that 43 per cent of small to medium enterprises (SMEs) were paying more supply costs, while a quarter had also reported a plunge in revenues.

Worryingly, almost one in ten SMEs also reported that they had already started making staff cuts.

Director of small and medium enterprise at Orange Business Services, Martin Lyne, said: "The jury is clearly out on the long-term effects of the current economic climate, but businesses are obviously feeling the pain.

"We need to help businesses innovate and get through the hard times … they can help bring the British economy back onto an even keel."

Orange's investigation also discovered that only one out of 50 small businesses had been refused finance, although at what interest rates loans were being given at was not evident.

A poll last month found out that almost half of small businesses in the UK were unaware of the impending rise in national minimum wage rates, which will affect business payroll.