Economic conditions create 'unstable situation' for small businesses

News Article - 23 May 2012
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Small businesses in Britain are currently facing an "unstable situation" caused by rising oil prices and high UK fuel duty, an expert claims.

Firms worried about the current economic climate may find that accounts software offers them an effective way of managing their finances.

According to the Forum of Private Business (FPB), many UK small and medium-sized enterprises (SMEs) see "little point in planning for the future, as they are unable to predict when oil prices will stabilise".

Planning for the future is vital for smaller firms, but Phil McCabe of the FPB believes that many businesses are being forced to pass the cost of increased prices on to their customers as an "unfortunate necessity", often making them less competitive.

"FPB members are already reporting adverse effects to their business, saying they are struggling to pay for the inexorable rise in fuel prices," he explained. "Many of the FPB’s members cannot afford to absorb the cost themselves."

Recent data from the FPB indicated that over 80 per cent of small business owners in the UK believe that rising fuel costs are likely to make it more difficult for them to expand their operations over the next year.

The poll of more than 9,000 bosses revealed that almost 40 per cent believe that they will be forced to reduce staff numbers over the next 12 months and the FPB is urging ministers to reduce fuel duty in order to ease the burden on small businesses.

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