Smaller firms aim to cut costs

Reducing business costs is seen as the priority for small firms in 2012, with access to working capital surprisingly of least importance, according to a new survey.

A quarter of respondents said they need to restructure their business and will need more capital. The findings of the study, carried out by the Small Firms Association, includes a 66% vote for cost reduction as the key for this year. Improving productivity and performance levels was most important element for 59% of respondents, but attracting or retaining employees with key skills, restructuring the business and accessing fresh working capital were rated by only 32% and 27% of respondents, respectively.

“Costs in Ireland continue to hamper the development of small business,” said SFA director Patricia Callan. “Labour costs and flexibility remain the most significant problems facing small businesses, but non-pay costs — such as energy, commercial rates, rents and government regulatory costs; including licences and charges — are exerting huge pressures on the ability of small businesses to invest, develop, expand and create new jobs. The recommendations of the Government’s Advisory Group on Small Business — to tackle these issues — must be speedily progressed.