The British business barometer research from Hitachi Capital Business Finance found that managing cash flow (26%), retaining business (20%), and skills gaps and shortages (14%) were also key issues for UK SMEs.

The research found that too much compliance was having a significant impact on SME owners, with a third of finance businesses (32%) and 35% of law firms claiming that worries over paperwork were keeping them awake at night.

Some 28% of small businesses in the real estate sector and 26% of those in the medical sector revealed that problems regarding red tape and bureaucracy were now their top concerns.

Across all sectors, one in five SME owners (20%) were currently concerned about compliance (2016: 15%).

A fifth of SMEs (20%) expressed significant concerns over economic volatility in Q1 2018, down from the 21% recorded 18 months ago.

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The top 10 concerns keeping SME owners awake at night

“Over the past 18 months, the mountain of paperwork for small businesses has become taller, and the fact this is now their chief concern ahead of others issues gives some insight as to what they are facing on a day-to-day basis,” said Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance (pictured above).

“With Brexit, there is likely to be tighter control on regulation for many businesses in and outside the UK.

“But the huge positive to draw is that it is clearly not denting small business confidence.”

Two in five SMEs anticipate growth in the next six months – a slight rise on the previous two quarters.

“Our research also shows that more small businesses plan to hire staff, invest in new equipment and expand into new markets or overseas,” added Gavin.

“Despite a hike in administrative work, SMEs are still focused on the pursuit of growth – and we’re there to help them achieve it.”