Business owners fear they may not be able to keep their doors open for much longer as the cost of running a business continues to increase.

Co-owner of popular Auckland dumpling food truck and restaurant The Rolling Pin, Yina Yang, said “the business is doing OK”, but like many small to medium sized business (SME), was feeling pressure from rising prices and competition.

A MOB survey of more than 1000 SME owners, directors and managers highlighted that the ongoing impact of inflation and the Reserve Bank’s efforts to control it was taking its toll.

About 34% of SMEs had seen revenue fall over the past 12 months, while (38%) leaders said they could only sustain their business for up to six months before they would need to dip into their personal finances or seek additional finance.

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On average, SMEs estimated their business overheads, such as rent and electricity, had increased by more than $1500 a month in the past year, with just 13% saying costs had increase in the past 12 months.

Comparing her current situation pre-Covid, Yang said some of the goods required for the business had tripled in price.

While The Rolling Pin had increased some prices slightly, Yang said it was a “difficult choice”, because they did not want to lose customers.

“On top of this, further changes to the minimum wage have also added significant cost to the business,” she said.

Changes to consumer lifestyle and spending habits continued to be felt, she said.

With three sites at Ellerslie, Wynyard Quarter and DressMart, Yang had noticed DressMart was quieter in the evening with less foot traffic, and working from home meant fewer customers at the Wynyard site, with Friday’s notably quieter.

Yang said while the business was solid overall, she worried about the economic environment and what would happen if costs continued to rise.

MYOB spokesperson Jo Tozer said inflationary pressures continued to dampen SME confidence, which had remained stubbornly low over the past year.

“Across the country, SME leaders have pointed to rising inflation and the high cost of living generating the most pressure, with three quarters saying it was having the biggest impact on their level of confidence,” Tozer said.

“Likewise, the other major influences on SME confidence are also inflation-related, including the cost of fuel (up 64%) and interest rates (up 61%).”

On top of the most recent StatsNZ GDP data showing the economy shrank by 0.6% in the December quarter of, falling profitability and revenue among SMEs could also point to a possible contraction in activity for the first quarter of this year.

Recession warnings were flashing red for SMEs, with 80% saying they were concerned about the risk of the economy entering a recession this year.

It was a critical time for many SMEs, as they faced the risk of recession with few resources to give them a buffer against a big downturn in trade, Tozer said.