Small Businesses Fear Cost Hikes and Fuel Prices as Top Risks
A survey reveals that 35% of small entrepreneurs in Latvia see cost increases as the main risk, while nearly a third point to fuel prices. Geopolitical situation and tax changes add to concerns.
According to a survey by Luminor Bank, 35% of small business owners in Latvia consider the overall rise in costs as the biggest threat to their revenues by the end of the year. Almost as many, nearly a third, cite the impact of energy and fuel prices, which in April were 8.7% higher than in March.
Another 27% of respondents see changes in customer behavior, including shifts in consumption habits and demand, as a significant risk. Slightly less than one-fifth mention rising labor costs—salaries, labor shortages, and growing employee expectations—as a major challenge. These factors directly affect profitability and pricing, according to Luminor experts.
Nearly a quarter, or about 25%, of surveyed small entrepreneurs believe that the geopolitical situation could negatively affect their revenues. Geopolitical risks, such as oil supply disruptions or sanctions, also echo in fuel markets, increasing logistics costs. Meanwhile, 10% of respondents worry about tax or regulatory changes, although in Estonia and Lithuania this figure is higher—16% and 19%, respectively.
Comparing Baltic states, the strongest concerns about cost increases are in Estonia, where 42% of entrepreneurs mention inflation and operating costs. In Lithuania, the main risks are inflation and energy prices, each cited by 30% of respondents. Uģis Počs, head of the Small and Medium Enterprise Service Department at Luminor Bank, emphasizes that companies in the Baltics view risks similarly, as price pressure is largely driven by international processes.
