WEALTH April 20, 2026 0 Comments

Why 75% of Small Businesses Are About to Hit Your Wallet — And What That Means for Your Next Purchase

Ever wonder how Irish SMEs are keeping their heads above water while operating costs skyrocket by a staggering 10% over just six months? It’s like trying to sprint uphill in a hurricane — yet somehow, 76% of them are passing these costs on to customers without losing stride. What’s even more surprising? Nearly all these businesses aren’t just surviving; they’re gearing up to invest and grow in 2026, with confidence levels soaring above 80% across sectors like manufacturing, construction, and transport. It’s a tale of grit meeting opportunity, where rising inflation and supply chain disruptions collide with bold plans for expansion and innovation. But here’s the kicker — with profitability under pressure and access to finance feeling like a tightrope walk, how will these SMEs balance ambition with caution? Stick around as we unpack the resilient spirit and strategic moves fueling Irish SMEs amid a rapidly shifting economic landscape. LEARN MORE

Operating costs have risen by an average of 10% in the past six months for Irish businesses, and three-quarters (76%) of SMEs have passed on the increase to customers with higher prices, new research from Bibby Financial Services shows.

Despite rising costs and macroeconomic pressures, however, nearly all Irish SMEs (95%) are planning to invest this year, and more than four in five (83%) businesses surveyed across sectors including manufacturing, construction, wholesale, transport and services expressed confidence for the year ahead.

A total of 250 Irish SME owners and decision makers were questioned for the study, which shows that 60% of businesses reported increased sales over the past six months, up from 53% in the previous wave of research.

Looking ahead, 71% expect sales to rise further, increasing to 78% among SMEs using external finance, highlighting the growing role of funding in supporting growth.

Confidence is particularly strong among larger SMEs with turnover above €5m (92%), as well as in the wholesale (93%) and manufacturing (90%) sectors.

In terms of businesses’ top investment priorities, staff training and development (35%) led the way, ahead of digital technology and IT (34%) and recruitment (30%).

Rising costs continue to present a significant challenge for SMEs, with over half (52%) citing inflation and high costs as a primary concern, closely followed by energy costs (51%).

While the vast majority of SMEs are passing on price increases to the consumer, one in five businesses are unable to pass on costs and are absorbing the impact.

Margin pressure is particularly acute among larger SMEs, with 90% of businesses with turnover above €5m reporting reduced profitability. In practice, this means investment is being paced and prioritised, not paused.

Alongside cost pressures, SMEs are also dealing with increased risk in their supply chains and customer base. In the past six months over half (55%) have had a supplier become insolvent or stop trading, while 54% have experienced a customer becoming insolvent or ceasing operations.

On average, SMEs reported two suppliers and two customers have become insolvent or stopped trading in the past six months.

Two-fifths (40%) of SMEs have also suffered a bad debt in the past year, with wholesale businesses particularly exposed.

Access to finance is becoming an increasingly important issue for SMEs, with 46% reporting a greater need for funding and 51% saying they are now more likely to use external finance compared to six months ago.

However, challenges remain, with 57% believing access to finance has become more difficult, rising to 72% in the transport sector.

More than half (52%) believe banks are less willing to lend, while 40% feel that traditional bank funding does not fully meet their needs.

Businesses are primarily seeking funding to support expansion and investment (40%) as well as day-to-day operations (35%), underlining the growing importance of finance as a strategic enabler.

However, 55% of SMEs expect to increase international trade over the next 12 months, and over a quarter (28%) identify international trade as a key opportunity, rising to 39% among larger firms and 34% among businesses in Leinster.

At the same time, 65% of SMEs are exploring merger or acquisition activity for 2026, signalling strong ambition for growth.

Internationally trading businesses are also more likely to experience supplier and customer insolvencies, though, highlighting the increased risks that accompany global expansion.

“Irish SMEs are operating in a more complex and uncertain environment, with renewed inflationary pressure and global volatility reshaping decision-making.

“Despite this, confidence remains strong, with more than eight in ten businesses optimistic for the year ahead,” said Mark O’Rourke, managing director of Bibby Financial Services.

Sims IVF — Operating costs for Irish SMEs have risen by an average of 10% over the past six months.

“Many Irish SMEs plan to continue to plan, invest and grow – provided growth is pursued with control, clarity and strategic intent.

Rather than pursuing broad‑based expansion, many SMEs are prioritising investment in areas that support productivity, digital capability and operational resilience.

“Those that balance financial discipline with investment in productivity, capability and resilience will be best placed to navigate the remainder of 2026 and beyond.”

Photo: Mark O’Rourke. (Pic: Supplied)