Rising cost of living biggest concern for UK small businesses but tech adoption and mentoring offers lifeline
June 27, 2022 | London, UK- To mark the UN’s Micro-, Small- and Medium- Sized Enterprises Day, Mastercard survey of UK small businesses reveals inflation and rising energy prices are the current biggest challenges
- But many remain positive with technology and mentoring cited as vital to business success
- Strive UK offers micro and small businesses free access to the support and guidance they need to identify, utilise and benefit from technology to succeed
New research among UK small businesses from Mastercard reveals two years on from the pandemic, rising inflation and energy costs are now their top concerns, although many remain positive about their future prospects provided they have the support they need to succeed.
Released to mark the UN’s Micro-, Small- and Medium- Sized Enterprises Day, the Mastercard Strive Business Barometer found that small businesses say rising inflation (42%) and energy prices (38%) are their current biggest challenges, with around 1.5 million owners (28%) expecting their business to contract this year as a result.
One in five (22%) say they now feel more concerned about their business than before – a significant jump from the 15% who said the same in February 2022.
Despite these current concerns, the data shows there is optimism among many of Britain’s small business owners about the future. Almost six in ten (57%) say they feel generally positive about their business’ future with this highest for those businesses in construction and manufacturing (65%) and education and healthcare (62%).
Technology is crucial to support small businesses as the research found that businesses that already utilise technology are more likely to feel positive. Around half (48%) of those using digital payment methods and the same proportion (51%) of those who have adopted social media and online advertising say they plan to grow the business in the next five years – significantly higher than the average (39%).
Two in five (40%) small businesses say they are likely to increase the use of technology and digital tools going forward, with the same proportion (39%) saying access to new technology and digital tools will be crucial to the future growth of the business. One in four (23%) say that access to mentorship and support will also be central to their business success.
Mastercard is addressing these issues with Strive UK – a programme designed to help the UK’s micro and small businesses access the support and guidance they need to identify, utilise and benefit from technology – whether accounting software, online marketing or digital payment options.
Mary Portas, retail expert and ambassador for Mastercard’s Strive UK said: “After struggling to stay afloat through the pandemic, the cost of living crisis is now adding extreme pressure to small businesses across every sector. These businesses are not only the backbone of our economy - making up 99% of all businesses - but of our communities, and have played a crucial part in society during recent years as people have wanted - and needed - to shop local.
“As we look ahead, it’s clear that technology will play an increasingly central role in small businesses success - particularly for female and ethnic minority entrepreneurs who have historically faced greater challenges. But for many business owners, it’s difficult to know what the right tools are for their businesses and where they can access support. That’s why initiatives like Mastercard’s Strive UK are so important, to help small business owners get the help they need not just to survive, but to thrive in years ahead.”
Kelly Devine, Division President, UK & Ireland at Mastercard, comments: “Over two years on from the start of the pandemic, small businesses are once again faced with challenges as they operate their business in the current economic environment.
“Despite this it’s positive to see so many business owners feeling optimistic about the future. Those that already invest in technology are the most confident, and the majority of businesses see technology as a vital part of their growth going forward. The Mastercard Strive UK programme is designed to help UK business owners navigate the current challenges and succeed, offering free guidance and personalised, one-to-one coaching to ensure they can adopt – and benefit from – digitising their businesses.”
To find out more about Strive visit www.mastercard.co.uk/strive
--ENDS--
Methodology:
Opinium, on behalf of Mastercard, surveyed 1,000 small business owners (1-49 employees, including sole traders) in the UK between 3rd and 13th June 2022.
*Figures based on FSB numbers showing 5.5 million businesses with 1-49 employees in the UK in 2021. https://www.fsb.org.uk/uk-small-business-statistics.html
Media Contacts
About Strive UK
Strive UK is an initiative of the Mastercard Center for Inclusive Growth that aims to that aims to empower 650,000 micro and small businesses in the UK to succeed in the digital economy over the next three years through free guidance, helpful tools, and personalised, one-to-one mentoring. The programme is run in partnership with Enterprise Nation, Digital Boost and Be the Business, and has been designed to complement Government initiatives such as Help to Grow. Strive UK builds on Mastercard’s $250 million commitment to support small businesses’ financial security and extends the company’s commitment to financial inclusion, with efforts underway to bring a total of one billion people and 50 million micro and small businesses into the digital economy by 2025.
- Enterprise Nation has created the Make a Plan app for micro and small businesses to help them understand and find the resources, programmes and tools available to them. The company will also manage a Strive Learning Network, bringing together large corporates and not for profits involved in delivering support to small firms for the purpose of sharing views and insight on what's working when it comes to building the conditions for enterprise to thrive.
- Be the Business will deliver bespoke digital adoption and leadership development programmes for minority ethnic owned/led micro and small business, with a special focus on female owners from minority ethnic backgrounds.
- Digital Boost will provide mentorship, advice and coaching to help micro and small business owners to develop critical business skills.
About Mastercard (UK)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.
