Two-thirds of UK small business owners say the last two years have been the most challenging since starting their business.
However, PayPal’s annual Business of Change report, which this year focuses on ‘Wellbeing & Empowerment’, revealed almost half of the fears that the next 12 months could be even more difficult.
PayPal’s report revealed small business owners across the country, revealing that three-quarters believe the immediate cost of living crisis is the biggest threat to their business given the lack of consumer spending and sharp fuel price increases.
Other challenges include maintaining a stable cash flow, managing their own mental health and managing the increase in raw material costs. Given this perfect storm, more than a quarter of SME owners say they are not sure they will be up and running at all within the next 12 months.
The economic well-being of British entrepreneurs will be a hit in 2022
Running a business at the best of times is not easy. In fact, three out of five small business owners agree that it is stressful. But with the economic pressure on inflation, supply chains and the cost of living, more than half of SMEs are now worried about their future.
To keep their business afloat, SME owners work weekends, go six months or more without taking a much-needed vacation, and a third even work seven-day weeks on a regular basis. The stress and worry of running a business keeps 62 percent of SMEs awake at night, leaving a third feeling alone and isolated because there is simply too much going on in the world for them to process.
The result? Poor economic well-being, evident in the fact that a quarter of SMEs ignore the financial health of their business and fear what the true picture is, and almost half admit that they do not have an emergency fund set aside to deal with any unexpected costs.
Taking control back: the key to financial well-being and navigating the cost-of-living crisis
The challenges of the last two years have forced many SMEs to reach the top of their finances by upgrading their skills by using finance apps (31%) and learning from past mistakes. In fact, one in five SMEs agrees that the last two years have had a positive impact on their ability to manage their financial well-being, with 56% feeling more financially sound, 27% feeling back in control of their business and one in five feels more empowered. as a business owner since improving their financial knowledge.
In fact, small business owners believe that having a financially sound business will create new opportunities for them personally, including having more confidence as a leader, having savings for the future, and experiencing less stress.
SMEs also mentioned some of the most important areas that they would change to achieve financial well-being would be to take more time back for themselves and to grow their business through expansion.
Ben Ramsden, Head of Small and Medium Enterprise (SME) at PayPal, said: “” Financial problems and stress can have a negative impact on health and well-being. In tough times, it is an important tool for small business owners to keep track of their financial well-being. Minimizing the personal impact of running a business should be a priority, which can be an isolating and challenging experience for entrepreneurs. As a trusted partner, we help enable small business owners to manage their financial well-being by providing simple tools and technology to alleviate unnecessary stress by offering them hassle-free payment solutions so they can focus on the big picture. “
