» Click here for the original article

Small businesses across the UK are continuing to experience declining operating costs – More Th>n Business has found that the cost of running a small business has fallen to -1.4% over Q1 2009.

The sharp decline marks the second consecutive quarter of sustained deflation for the small business community, says the insurer. It says declining labour, advertising, vehicle and raw material costs have all contributed to the continuing falls in Q1 2009, however More Th>n Business warns profit margins still remain under huge stress due to low demand for products and services.

Mike Bowman, head of More Th>n Business, says: "The fact that we're experiencing such sustained deflationary conditions demonstrates just how deep the recession has become in the UK. While it is cheaper to run a small business, it is clear that demand for goods and services is dropping off considerably and that is why prices are spiralling downwards."

Stephen Roper, professor of enterprise at the Centre for Small and Medium Sized Enterprises, Warwick Business School, says: "Looking forward it is genuinely quite hard to predict which way the small business economy will move over the next year. I doubt we will get back to the very sharp inflation we have seen, but I suspect we will move closer to cost stability next quarter."

Bowman warns the last four quarters of extreme instability has made financial planning for business very challenging: "The volatility has made it very difficult to plan and invest, placing tremendous pressure on cash flows and managing stock and staffing levels. There are a lot of small businesses which have never experienced anything like this before."

If you have not been able to know where to turn over the last few months, maybe it's time to take stock. Talk to a financial adviser about what can be done to reinvest your assets and remanage your debts. While the cost of doing business is down, take advantage of the situation with some improved financial decisions.

SOURCE: More Th>n, 15/06/09

Keep up with the latest news and comments on Self Employed Mortgages at the Self Cert Mortgage Blog