Profits at SMEs hit by increasing fuel costs

Sep 29 2008

Bank of Scotland survey says most SMEs passing on costs to customers

A third of leisure, tourism and hospitality business owners in Scotland claim that profits have been badly affected by rising fuel costs says a new survey.

Overall a fifth of Scotland's SMEs claim to have seen their profits badly affected by the increases in fuel prices, and about half  claim to have been hit with a slight drop in profits says Bank of Scotland Business Banking.
 
Six in ten small business owners in Scotland have passed on some if not all of these rising costs to customers in order to remain profitable, although less than one in ten have hit customers with the full increase.

Two-thirds of Scotland's SMEs are expecting to increase the prices charged for their goods and services over the next year as a result of their own increased costs. In two-thirds of cases where price rises are envisaged, they will be above the official rate of inflation. A fifth of these price/fee rises will represent increases of more than 10%.
 
Peter Wood, Head of Strategy and Products at Bank of Scotland Business Banking, said: "Small business owners are acutely aware of the impact that additional fixed costs can have on the bottom line, and the majority have seen many of these costs increase exponentially over the past few years. Against a background of difficult trading conditions, the majority of these entrepreneurs have little option but to pass on these costs to customers. With price rises looking likely to continue, it's crucial that small business owners turn to advisers such as their accountants or bankers to seek advice about controlling operating costs in their efforts to remain profitable."