Hundreds of thousands of small businesses in the UK could face closure this year due to rising costs, according to a report from website builder GoDaddy.

The annual Venture Forward study found that nearly one in eight microbusinesses, defined as employing fewer than 10 people, fear they will have to fold, which equates to approximately 630,000 businesses.

The cost of living crisis was identified as the greatest challenge ever faced by more than three-quarters of microbusiness owners, with energy costs being the biggest concern.

The study also found that only 20% of microbusiness owners believe the government is doing enough to help them.

GoDaddy's UK manager, Andrew Gradon, emphasized that microbusinesses make up 96% of all businesses within the country's private sector. The report predicts that if the 12% of microbusinesses under threat were to fail, it would result in a £12bn loss to the economy.

The study also highlights the disproportionate impact of the cost of living crisis on underrepresented entrepreneurs. According to the report, 85% of black entrepreneurs and 84% of Asian entrepreneurs believe this is the worst time they can remember, compared to 75% of white entrepreneurs.

The data demonstrates that the Covid-19 pandemic and its economic impact are still wreaking havoc on small businesses, particularly those owned by underrepresented groups. The ongoing cost of living crisis and the lack of sufficient government support continue to put the survival of many small businesses at risk.

These small enterprises are the lifeblood of the economy, and their failure would have a devastating impact on both the financial and social fabric of the UK.

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