Independent bars and restaurants survival chances and growth opportunities are being severally hampered by rising business costs, with 59% fearing for their future if costs continue to escalate, according to a new study. The survey by saving advisor Make It Cheaper and the Centre for Economic and Business Research (Cebr), found that small business overheads had risen by almost a quarter over the past five years. The study, which is based on independent research among owners and managing directors of 750 UK small businesses, found that the vast majority of independent restaurant and bar owners identify rising costs as the most significant threat to their company this year (76%). Roughly the same number (77%) also warned that the country has become an unbearably expensive place to do business. Rising costs over the past five years have damaged the growth of over three quarters (77%) of independent UK restaurants and bars, and will limit the growth of 81% this year, according to the research. The report said that nearly seven in ten (67%) of these hospitality establishments had seen their profit margins hit by increasing costs over the past three years, to the tune of 22% on average, whilst more than half (53%) had been forced to increase prices and a third (34%) cut staff. The study also found that this trend was repeated across all UK small firms, with three fifths (59%) of small business owners claiming that the high cost of doing business in the UK was acting as a disincentive for growth, whilst 86% believe it was damaging economic recovery. The Cebr and Make It Cheaper’s own Business Cost Index (BCI), an inflation tracker for small business overheads, showed a 22.8% rise in small business costs over the past 5 years, compared to the ONS Consumer Price Index, which increased by 19.4% over the same period. According to the research, businesses themselves reported an overall average rise in business costs of 4.5% year-on-year to July 2011. In terms of individual overheads, the biggest risers predicted by the BCI are transport costs, which are expected to rise 20.5%, energy bills, are forecast to grow 8.5% and insurance premiums, set to rise 7.1% in 2011. Jonathan Elliott, Managing Director of Make It Cheaper, said: “Rapid cost increases are placing the survival of small companies in jeopardy, and dampening the entrepreneurial spirit so crucial to economic recovery. Government policy needs to curb business cost inflation this year.”