Around 630,000 microbusinesses in the UK are at risk of going under this year, according to new research.
The annual Venture Forward study by web hosting company GoDaddy found that nearly one in eight microbusinesses — defined as those with fewer than 10 employees — fear they may go bust.
It comes as increased business costs and a drop in consumer spending have put huge pressure on small traders.
The report estimates that if the 12% of microbusinesses under threat actually collapsed, it would wipe as much as £12bn from the economy.
Microbusinesses represent 96% of all businesses in the UK’s private sector, according to Andrew Gradon, GoDaddy’s UK manager.
“They are the lifeblood of businesses in the UK and it’s them that are on the frontline very much feeling the direct impact of the cost of living crisis,” Gradon said.
Fewer than one in five (19%) microbusiness owners said they think the government is doing enough.
And more than three-quarters (77%) described the cost of living crisis as the greatest challenge they have ever faced, with many highlighting the impact of higher energy bills.
Responding to the report, a UK government spokesperson told Sky News: “We recognise that companies are struggling with energy bills which is why the government is providing businesses with billions of pounds of support.
“This support means some will be paying around half of predicted wholesale energy costs this winter. We’ve pledged further energy support from April onwards.”
