Nearly two thirds of small businesses in rural communities are fearful of the future of their business in the coming months

This is according to new research done by the National Farmers' Union Mutual Insurance (NFU Mutual).

According to a survey done by the insurance company, a quarter of business owners in rural areas said that their biggest concern was the rising cost of operating their business.

This is significantly higher than the 11% of owners in suburban areas, and 10% in the inner city, who appear less affected by the increases.

NFU Mutual said the pressure has risen significantly in the last year, with almost three-quarters of those surveyed saying they had seen an increase.

According to NFU Mutual, rising energy bills have cost rural businesses the most damage; one in 10 said a jump in rent and premises costs was causing them the biggest headache.

Rising costs are also affecting consumers as they begin to cut back on spending.

A fifth of business owners participating in the survey said a lack of customer demand and spending was the biggest issue they are currently facing.

The survey also found that the price of goods and materials (18%) as well as economic uncertainty (12%) were big worries among participants.

Autumn budget

However, in last week’s Autumn Budget, the government announced that it would be increasing the Small Business Rate Relief threshold to accommodate a further 70,000 retail, hospitality and leisure businesses.

The measure, which offers 100% relief for qualifying properties, saw the rateable value threshold increase from £12,000 to £18,000, starting in April 2027.

Head of commercial at NFU Mutual, Zoe Knight said that the last few years have been extremely difficult for small businesses, which continue to face a multitude of challenges.

She said: “The fact our research shows that many have seen costs rise more than 20% compared to last year, and only one in 10 expect to increase staff over the next 12 months, just go to highlight the point.”

Knight added that the Autumn Budget would have been a relief for thousands of small businesses.

“However, it is still as important as ever, where possible, in the current climate to support the excellent service they provide,” she said.