Microbusinesses with fewer than 10 employees are struggling with the rising cost of doing business, according to a survey that found confidence among such firms scores just 3.7 out of 10.
A barometer by professional services firm Azets found microbusinesses are much less confident about the year ahead than larger companies – the overall business confidence score from Irish small and medium businesses surveyed was 7.4 out of 10.
Irish businesses were found to be the most optimistic of the six Northern European countries surveyed in the report (others being the UK, Norway, Finland, Sweden and Denmark), as upper medium-sized businesses with 100-249 employees expressed the highest levels of optimism within Ireland’s SME community, scoring 7.5 out of 10.
Azets said there was a “clear correlation between business size and financial confidence”, with smaller firms in Ireland in a significantly weaker financial position relative to their peers.
Neil Hughes, chief executive of Azets Ireland, said firms with nine or fewer employees were struggling as costs continued to rise.
“Double-digit increases in the minimum wage, lingering inflation and higher taxes are putting a significant squeeze on smaller firms. With €1.75 billion in warehoused pandemic-era debt due from 58,000 businesses, it is increasingly important that smaller firms are given flexibility and time to pay back the tax,” he said.
According to the survey, Irish business leaders ranked economic and geopolitical uncertainty (both 5.7) as the challenges to the forefront of their minds, followed by talent recruitment and retention (4.9) and regulatory compliance (4.4).
Business owners expect turnover, profit and headcount to increase in the next 12 months, with scores ranging from 6.9 to 7, but firms said they were more cautious about borrowing to fuel growth this year.
The survey found that businesses viewed Ireland’s tax regime favourably, with firms rating the ability for current tax policies to promote business growth a 6.8 out of 10.
Regarding how seriously firms are taking succession planning, 85 per cent of Irish businesses scored between 6 and 10, compared with an average of 47 per cent in other Northern European markets surveyed.
Azets surveyed 112 small and medium-sized businesses across Ireland between November and December 2023.
The international outsourcing, compliance and advisory group employs about 7,600 staff across its network of 187 offices in the Nordics, UK and Ireland. It employs more than 100 people in its Irish operation, with offices in Dublin and Wexford.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
