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SMEs Raise Concerns over Inflation

SMEs Raise Concerns over Inflation

SMEs are concerned over the cost of inflation

According to research by business bank Aldermore, SMEs believe that inflation will hit them hard because they don’t have the influence of larger businesses when it comes to negotiating with suppliers and clients.

The concern is that inflation will increase the cost of buying-in goods and services, and small firms wonΓÇÖt be able to pass on the price rise to their customers.

The research states that over 80% of respondents expressed concerns over suppliers raising their prices, and only 45% said that they could cope with the increase by upping their own rates.

According to, Phillip Monks, chief executive of Aldermore, said:

“Small businesses are worried that the lack of negotiating clout with both their suppliers and their customers means that they are going to come off worst from the current spate of inflation.

“Big businesses with dominant market shares are going to find it easier to pass on price increases to their customers and wring concessions out of their smaller suppliers. Unfortunately many small businesses don’t have that kind of negotiating power. Few businesses like inflation but small businesses probably least of all.”

However, despite the concerns over inflation, other research suggests that SMEs are in a good position coming off the back of 2010.

Figures from online marketplace giant eBay shows that an export boom resulted in small firms accounting for £446m last year, an increase of 128% since 2007. In the wider economy, there was only a 9% increase in exports during the same period.

“Despite the economy continuing to suffer from faltering domestic demand, many businesses are proving it is possible to defy the economic gloom and achieve recession-busting growth and profitability through exports,” said Clare Gilmartin, vice president of European Marketplaces at eBay, according to My Business.

According to the research, the US, Australia, Germany, Ireland and France were among the top export markets for UK businesses.

She added: “With the economy continuing to suffer, it is essential that the government does all it can to help small firms to exploit the export opportunity. Our figures show that 4,000 firms are already raking in at least ┬ú10,000 a year in exports, but if we want to boost the economy, we need to build on that success.”

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Author: | March 2, 2011 | 0 Comments

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