Economic volatility is pushing Britain's small business owners to breaking point, with more than three in four (78%) now losing sleep over mounting pressures. New research from Novuna Business Finance reveals that concerns over economic volatility and geo-political uncertainty have reached a record high with 52% citing general economic volatility as their biggest concern in the first quarter of 2026.
The findings highlight a sharp rise in anxiety compared to two years ago, particularly around tax and interest rates, which have jumped from 28% to 42%. The increase follows last year's National Insurance hike for businesses, intensifying pressure on already stretched firms.
Worries over red tape have also surged (up from 21% to 30%), alongside growing concerns about compliance and regulations (25%) and business rates (22%). Meanwhile, persistent challenges such as cashflow and retaining customers remain stubbornly high.
Joanna Morris, Head of Insight at Novuna Business Finance, said the data exposes the hidden personal cost behind business resilience.
She said:"At the start of 2026, we saw a rise in London's small business growth outlook. That said, our latest data suggests that this comes at a human cost for many business owners, many of whom take their business worries home with them and struggle to switch off.
"Given ongoing concerns among small businesses about the impact of geo-political volatility and economic disruption, the recent escalation of hostilities in the Middle East will be a significant worry, as will the prospect of further rises in energy costs, which were already a major concern.
"When business owners are kept awake at night working through enterprise issues, we gain a sense of how intense some of these concerns can be for entrepreneurs. Further, our research suggests that sleepless nights are not just confined to businesses that are struggling to grow.
"Managing fast-paced or significant growth can also be stressful for established businesses. Among the enterprises surveyed that predicted significant expansion this quarter, there was a notable increase in the percentage of business owners who said that business worries kept them awake at night."
The research also shows that Brexit continues to cast a shadow, with 15% of small business owners saying its long-term impact still keeps them awake at night.
Regionally, the problem is most acute in the South West (82%), North West (81%), Yorkshire (81%) and South East (80%). By sector, manufacturing (89%), construction (87%), transport and distribution (87%) and agriculture (84%) report the highest levels of stress.
In a surprising twist, it is not struggling firms that are most affected but those experiencing growth. Businesses predicting significant expansion in the first quarter of 2026 are the most likely to report sleepless nights (85%), compared to 73% of those with no growth forecast.
Pinky Laing, Founder of Remnant Revolution told the Express: "The geo-political tensions around the world are a great concern to everyone, and the economic impact is already affecting many small businesses here in the UK. We're already seeing price rises at the petrol pumps and, for many small businesses, energy costs have been a worry since the start of the cost-of-living crisis."
"Economic pressures also present small businesses with an opportunity to re-think their mission, to adapt and operate differently. My business, Remnant Revolution, focuses on recycling remnant fabrics into sustainable homeware. It's a business rooted in the local community and we have a mission to empower women through meaningful employment and skills, to build connections that combat isolation and to reduce waste.
"I recently organised a 'Come Sew With Us' month-long pop-up in Cirencester that successfully showcased what we are doing as a business with a huge social purpose. My message to other small businesses out there that are kept awake worrying about energy costs, transport costs and logistics - now is the time to rethink your business. Think local, think sustainability and reduce energy use by recycling. Every business is concerned about rising costs and the risk of rising taxes, but Remnant Revolution is a good example of a dynamic small business that doesn't depend on favourable macro-economic conditions to grow and move forward."
Remnant Revolution aims to build and empower women-led communities while championing sustainability by rescuing fabric from landfill to create unique homeware.
Tony Sheppard, Director of family business En Tout Cas said:"Small businesses are operating in challenging market conditions, and many are worried by rising costs and economic uncertainty. We have adopted sustainable practices for our business. This involves making smart choices that save money and resources and it helps us to better manage costs, improve efficiency and make a lasting, positive impact on the environment."
En Tout Cas is a long-established, family-run business specialising in synthetic tennis courts and sports surfaces. The company has been associated with artificial sports surfaces for over a century, with the current family having built En Tout Cas courts since 1947 including the running track for the London Olympics that year. Their products have evolved into high-performance, long-lasting sports surfaces used in clubs, schools, and private facilities.
Sarah Halman-Thompson, Managing Director, of Buy Metal Online also said: "In the current market conditions, supply chains are tightening and are costs rising, which is a cause of worry for many small business owners. We've focused on reducing waste and costs, by selling metal offcuts directly to consumers rather than letting them go to scrap. Our customers appreciate that we're helping them be more sustainable. It's practical, it saves resources and reduces waste. these small, everyday steps are manageable and make a real difference to our sustainability as a business."
Buy Metal Online is a Newcastle-based sheet metal supplier founded by industry experts with over 30 years' experience. They serve a range of clients from large-scale fabricators and manufacturers to small businesses and DIY customers. Alongside sheet metal, they also supply metal splashbacks, garden products, and health & safety equipment.
The growth outlook research was conducted by YouGov among a nationally representative sample of 1,000 small business owners.
