UK small businesses say that the hike in energy prices following the war in the Middle East will cost them an average of £2,273.90 a month, according to new research conducted this week for Novuna Business Finance.
Whilst many consumers have noticed prices soaring at the pumps, small businesses need energy in various other ways. The national poll conducted last weekend asked UK small businesses what the impact of rising energy costs would mean for their bottom line. In terms of their monthly costs, small businesses say rising energy prices means they will pay an average of £753.56 more each month for transport, travel and logistics; an average of £785.92 more to run machinery and equipment – and average of £734.42 more each month to heat their office/workplace.
These new findings come at a time when Novuna Business Finance’s tracking research revealed the growth outlook of UK small business owners was already fragile, with just 27% predicting growth for the first three months of 2026.
The new data reveals that, since the outbreak of war in Middle East region, 82% of UK small businesses said they had already felt the impact of rising energy prices.
When it comes to the energy needed to operate machinery or equipment, 78% of small businesses said they were affected by rising energy prices, with 41% of respondents saying they would have to pay more than £1,000 extra a month to cover energy bills. With travel, transportation and logistics costs, 21% of small businesses expected energy costs each month to rise by more than £2,000.
How small business owners are reacting to rising energy costs
Across the board, UK small businesses are taking steps to deal with these unexpected additional costs. More than two in five (44%) said they would have to raise their prices to their customers. In addition, 20% of small business owners said they would re-assess their funding arrangements with lenders, to free up more working capital – and 17% said now was the time to explore renewable or green energy options in an attempt to lower costs.
The research also suggests rising cost pressures could have an impact on jobs in the short and longer term. Whilst 16% of small businesses said they may have to let staff go as a result of rising energy prices, a bigger number (34%) said rising energy costs would encourage them to look at options for automating areas of their business, as a way to reduce overheads.
Jo Morris, Head of Insight at Novuna Business Finance comments: “Last year, many small business owners were worried about the impact of rises to Employer’s National Insurance, but the unexpected impact of soaring energy prices could impact small businesses more profoundly. Unlike consumers, small businesses don’t benefit from a price cap and they have greater and more varied energy requirements. The impact of yet another cost burden for UK small businesses comes at a time when their growth outlook is already fragile.
“In the face of these new market pressures, it is good to see small businesses being prepared to take remedial steps. For many, reviewing green energy options is an avenue to explore – and we know from our research that sustainability remains an important priority for many smaller UK enterprises. One in five business owners also say they will review their funding arrangements and, for many, asset finance could prove to be an attractive option to help them streamline their funding, whilst freeing up working capital.”
