The Forum of Private Business has found that 94% of members it surveyed have seen an increase in business costs and 87% reported an increase in energy costs.
As business costs have continued to rise during the year, energy costs are still the most commonly seen increase among small businesses, the Forum has said. Its latest Cost of Doing Business survey, carried out among its members, shows firms are still facing an uphill battle to make ends meet, despite positive signs of an economic recovery.

Alongside this, 83% of its members have seen increases in transport costs, 78% in marketing costs, and 69% have seen a rise in the cost of raw materials/stock. The Forum's report also identified that 41% of small business owners admitted to being unable to pass any rising costs onto customers, forcing them to cut their own costs to keep prices static. Just 2% were able to pass on costs in full.

The Forum's head of policy, Alexander Jackman, said: "Unfortunately, it doesn't look as if there is going to be any respite from energy hikes any time soon, despite the ongoing political pressure to take action to introduce more competition in the market, with many of the major players recently announcing significant increases and others expected to follow suit."

Furthermore, 81% of firms indicated that rising business costs have been detrimental to their business, 73% have had cash flow issues as a result and it has had detrimental effect on 51% of firms when looking to invest. 51% also reported that it has been detrimental to employment levels and 63% feel that it has inhibited their plans for growth.

The most frequently cited exacerbating factors were customers paying late (59%), competitors offering products below cost price (51%) and excessive administrative demands, meaning businesses have not been able to focus on their core activities.

"As well as positive action on late payment we'd like to see further steps to help small firms with business overheads," Mr Jackman continued. "We'd like a freeze on business rates and small business multipliers next year. We feel that further action should be taken to investigate where further savings could be made to ensure that fuel duty is not raised again before the end of this parliament."

The issue of business rates has been raised by many organisations and industry experts, who are calling for a reform to help small and medium-sized businesses.