RISING costs are stifling the "entrepreneurial spirit" of Essex businesses, it has been claimed.

The price of gas, electricity, fuel and food, are taking their toll on small companies, according to Iain Wicks, chairman of the north east Essex branch of the Federation of Small Businesses (FSB).

Mr Wicks, who runs his own chutney making business, Vineyard Fine Foods, in Clacton, revealed his energy bill had risen by about ten per cent in the Past year, "enough to hurt" a small business, he said.

Mr Wicks, said he tried to absorb much of the rising cost, but was recently forced to pass on the price increases to customers.

"We have been lucky because we chop and change our energy supplier quite a lot, but ten per cent is still a big increase on your overheads.

"Then you have the increase in minimum wage, cost of tax and regulation and fuel. Our hauliers have notified us of an increase in cost, and we have noticed a rise in the cost of raw materials, too. It has a domino effect," he explained.

As well as adapting to rising costs, Mr Wicks said businesses, particularly smaller ones, could struggle to develop their businesses in the face of the rising cost of borrowing loans from banks.

"Businesses, like consumers, are having to look at affordability. If a business were going to borrow money to develop a new product, they might have to put it on hold," he added.

John Clayton, chief executive of Essex Chambers of Commerce agreed.

"Everyone can do things to start saving money - reduce your outgoings, if something is not viable, don't do it," he explained.

But Mr Clayton added that while businesses are experiencing a difficult time, the situation is just a "normal economic cycle".

"Businesses do not have the automatic right to stay in business, they have to adapt to the background. Businesses need to think about whether they need all the staff they have, whether they can relocate. The number of business failures will increase if the economy deteriorates and the companies that will benefit the most when things get better are those that have steered the business through the bad times," he said.

The FSB has a helpline for members. Call 0808 20 20 888.