Cold weather 'threatening small businesses'

The continuing snow and icy weather conditions are jeopardising the future of hundreds of small businesses across the UK, business groups have warned.

The Centre for Economics and Business Research (CEBR) told the BBC as many as 800-900 small businesses were under threat as a result of the cold snap.

Businesses where cashflow is vital, such as bars and restaurants, are really suffering, it said.

The Federation of Small Businesses said members were "particularly hard-hit".

Estimates vary widely about the full extent of the overall cost to the UK economy of the cold weather.

Douglas McWilliams, chief executive of the CEBR, told BBC Radio 4's Today programme that about one-fifth of the economy had been affected, costing about £1bn every day.

However, Chris Gorman at the Forum for Private Business put the figure at nearer £250m, with 10% of the workforce being affected.

'On the brink'

Some industries will suffer a temporary hit, analysts say. For example, construction projects will be put on hold until the weather improves. This is precisely what happened during the cold spell in January this year.

But other sectors, particularly retail and leisure, could lose out on business entirely, with potentially severe consequences for some small businesses.

"Quite a lot of small businesses are quite close to the brink now," said Mr McWilliams.

"I think at least a few hundred, maybe as many as 800 or 900, could go bankrupt that otherwise wouldn't have because this is the straw that breaks the camel's back."

He said businesses that rely on cash were particularly vulnerable.

"If a restaurant loses a night's business, it's not going to get it back," he said.

Well prepared

The Federation of Small Business said it was "disappointed that we still haven't learnt the lessons from previous bad weather and that the country has yet again ground to a halt".

However, it said small businesses were better prepared for this cold snap than those in previous years.

It said that four in 10 of its members had made arrangements in advance for staff to work from home, three in 10 were offering flexible working hours and almost one in five had bought their own supply of grit to clear shopfronts and the roads outside their premises.