Monday 7th January 2008
More than eight in ten small business owners expect the overall costs of running their business to increase during 2008 according to new research by Bank of Scotland Business Banking.
Out of those expecting costs to increase, approximately one in ten (12%) expect costs to increase by over 10%, whilst three in ten (32%) expect an increase of between 5 and 10%, and four in ten expecting an increase of less than 5%.
The research, which examines small business owners' predictions for a range of fixed costs in 2008, reveals that the majority of entrepreneurs expect all forms of costs to rise over the coming year including interest rates, rents, and property prices. However, one in five (22%) expect interest rates to decrease and nearly the same number (20%) expect commercial property prices to decrease.
Small business expectations
| Increase | Decrease | Stay the same | N/A or Don't Know | |
| Interest Rates | 45 | 22 | 47 | 6 |
| Rents for business premises | 44 | 3 | 36 | 17 |
| Rates of tax | 59 | 3 | 33 | 5 |
| Price of property | 30 | 20 | 27 | 22 |
| Price of supplies / raw materials | 75 | 3 | 16 | 6 |
| Salaries / wages | 58 | 1 | 39 | 1 |
*Those expecting costs to neither increase nor decrease either did not provide an answer or expected costs to remain the same.
Ivan Matviak, Head of Bank of Scotland Business Banking said: "Small business owners are acutely aware of the impact that additional fixed costs can have on the bottom line, and the majority will have seen many of these costs increase exponentially over the past few years. Against a background of continued market uncertainty, the majority of these entrepreneurs remain unconvinced by the scare stories and foresee further increases in prices and rates.
"It's crucial that small businesses seek out the best value by working with service providers that can provide them with the best deal possible. It may not seem particularly significant, but choosing the right bank account and the right utilities providers can provide a significant boost to end of year profits."
About Bank of Scotland Business Banking
Part of HBOS Plc, Bank of Scotland Business Banking provides a full range of products and services for small businesses with a turnover of up to £1 million pa. Over a third of all Scottish SMEs bank with Bank of Scotland. Bank of Scotland Business Banking is rapidly expanding its presence in England and Wales and all 700 Halifax branches now provide Business Banking facilities. The 100 largest branches in England and Wales also have a Business Banking Manager on hand.Bank of Scotland scooped two prestigious awards at this year's Business Moneyfacts awards for the second consecutive year, including Best Overall Business Bank and Best Computer Bank. As well as winning two out of the seventeen categories, Bank of Scotland received commendations in the Best No Notice Business Deposit Account Provider and Best Leasing & Asset Finance Provider categories.
