Growth on hold: how small businesses can take back control of rising costs
The UK's small business community has always been resilient. But new research from Enterprise Nation, EDF Small Business and Squared reveals just how difficult the current operating environment has become. According to the report, nearly seven in ten small businesses have delayed or cancelled growth plans because of rising costs, while more than three-quarters of high street businesses have been forced to put expansion on hold.
For many business owners, the challenge isn't a single expense. It's the combined effect of higher wages, VAT, employer National Insurance contributions, business rates, energy bills and supply chain costs all landing at once.
The result? Money earmarked for growth is increasingly being used to cover day-to-day operating costs.
Growth ambitions are still there
Despite the pressures, the research reveals that business owners remain ambitious. Many respondents reported postponing investment, hiring plans or expansion initiatives, not because they lack confidence in their business, but because rising costs have reduced the headroom needed to take the next step.
This is particularly true for customer-facing sectors such as hospitality and retail, where fixed costs continue to rise while margins remain under pressure.
Why managing overheads matters more than ever for businesses
While some cost pressures are outside a business owner's control, others present opportunities for savings.
The research found that only 24% of businesses had never received expert advice on managing energy and financial health.
That highlights a significant opportunity.
Even relatively small improvements can make a meaningful difference:
- Reviewing energy usage patterns
- Upgrading inefficient equipment
- Understanding available grants and support schemes
- Improving visibility of cash flow and operational costs
- Using your community to learn and share knowledge and skills
When combined, these changes can help free up funds that can be redirected towards investment and growth.
Energy efficiency as a growth enabler: a closer look
Energy is often seen as a fixed business expense, but it can also be an area where businesses gain greater control.
Whether it's replacing outdated equipment, improving building efficiency or accessing expert guidance, reducing energy waste can help protect margins and improve financial resilience.
As the Enterprise Nation report identifies, many business owners are simply unaware of the support available to help them improve efficiency and reduce operating costs.
At EDF Small Business, we're committed to helping business owners understand the options available to them, from practical efficiency advice to guidance on reducing energy-related costs. Here are a few tools and tips to help:
Looking ahead
The report's findings send a clear message: small businesses haven't lost their appetite for growth. They've been forced to prioritise managing costs.
The challenge for policymakers, lenders and support organisations is helping business owners reclaim the resources needed to invest in the future.
Because when growth plans are delayed, local economies feel the impact too.
With the right support, improved visibility of costs and practical steps to improve efficiency, many businesses can begin to shift resources back towards what they do best: growing, innovating and creating jobs.
Read the full report: Growth on Hold.
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