Three-quarters of small business owners have had to pass rising costs onto their customers, according to research.
The survey of 500 SMEs revealed 86 per cent were trying to minimise their overheads in an attempt to reduce further increases or keep their prices the same, amid the cost of living crisis.
This included carefully monitoring their energy bills (33 per cent), shopping around for cheaper suppliers (33 per cent) and putting a freeze on hiring staff (28 per cent).
However, 26 per cent of these small business owners were working unpaid hours to alleviate the financial pressure.
It also emerged fuel, raw materials and gas and electricity bills were the main rising “hidden costs” putting pressure on the end price of their product or service for the consumer.
And 28 per cent struggled with not knowing how much their next energy bill would be.
Three-fifths of proprietors, or 61 per cent, who were yet to increase their prices thought it was inevitable if the current trajectory continued – and 77 per cent feared they would have to hike their prices within the next six months.
Of those who had already had to increase their prices, 85 per cent said it was the “last resort”. While 44 per cent said their customers had been understanding f price rises, 53 per cent had lost some as a result.
The research was commissioned by Smart Energy GB. The campaign group’s spokesperson, Fflur Lawton, said: “Small businesses are facing many of the same challenges and price hikes that consumers are.
“And it’s inevitable that increased running costs will be passed on to customers in some instances.
“However, new research has found that many businesses are trying their best to minimise the impact of these price rises on their customers and are going to great lengths to keep their overheads as low as possible.”
The study found small business owners estimated their outgoings had risen by 13 per cent since the start of the year.
More than one-third (35 per cent) said uncertainty about rising costs was the most challenging thing about running a business – with 92 per cent concerned about intensifying costs for the remainder of 2022.
And 78 per cent said they believed the rising costs could jeopardise their long-term goals and ambitions for their business.
Working long hours and significant world events – such as the pandemic – also ranked among the leading challenges small businesses were facing.
Nearly seven in 10 (69 per cent) said plans were already being formulated so they could avoid increased prices in the remainder of this year.
Turning off appliances when not in use, reducing the amount of energy used and going paperless were the leading sustainable measures small business owners had taken to cut costs.
One-quarter said they had slashed the amount travelled for meetings and continued to embrace video calls.
Ms Lawton added: “When you are focused on keeping a business running smoothly, anything that helps make the day-to-day challenges a bit easier can be a welcome relief..”