Small business owners are more worried about rising energy and rent costs than they are about cashflow and their competitors, according to a new survey.

Higher utility bills and business rates came out top in two polls by insurance company Hiscox for small companies as a whole and office-based SMEs.

Other major concerns for the UK‘s small firms are the effect of changes in the economy on their business, dealing with red tape and winning new business.

Worryingly, companies are least bothered about the threat of unforeseen events such as power cuts, floods or fires, with just over one in two respondents citing this as a major concern in both polls.

“The research reveals an SME sector under considerable pressure, whether it be dealing with rising energy costs, fighting their way through business taxation rules or interpreting the myriad government regulations,” said Gary Head, professions underwriting director at Hiscox.

Nearly 70% of small companies are worried they may be victims of a spurious legal claim due to the rise of a no-win, no-fee culture, while over one in two office-based companies fear legal action being brought by a customer, employer or member of the public.

“The continued growth in the UK‘s compensation culture is very much evident in our findings, which show that a majority of SMEs are rightly worried about legal claims, both spurious and real,” added Head.

The results of the two polls in full are as follows:

The top 10 SME concerns:

  1. Rising costs such as energy or rent (78%)
  2. Business taxation such as rates, VAT and national insurance (77%)
  3. The effect of the economy on the business (73%)
  4. Paperwork/regulation (71%)
  5. Increasing sales or winning new business (68%)
  6. Competition (62%)
  7. Compliance with UK company law (61%)
  8. Technology malfunction (58%)
  9. Cashflow (57%)
  10. Business continuity, e.g. power-cuts (52%)

Among office-based SMEs:

  1. Business taxation such as rates, VAT and national insurance (76%)
  2. Rising costs such as energy or rent (75%)
  3. The effect of the economy on the business (72%)
  4. Paperwork and regulation (72%)
  5. Increasing sales or winning new business (69%)
  6. Technology malfunction (63%)
  7. Competition (62%)
  8. Compliance with UK company law (60%)
  9. Cashflow (57%)
  10. Business continuity (51%)