The owners of nearly one in eight microbusinesses, defined as employing fewer than 10 people, fear they will have to fold, equating to 630,000 businesses, as the cost keep rising.
Catherine Sweet who sells art for a living via her website BobCat Gallery and at exhibitions, says "a massive decline in consumer spending" coupled with rising living costs is a disaster for businesses.
"I know that my business could grow five-fold If I had a physical space, but every negotiation I have entered into with the landlord has come to nothing because I do not have the funds right now.
"Affordable rent subsidies for retail premises would be a huge boon, because for businesses like mine, having physical premises would be a game changer, but it's completely out of our reach," she said.
The annual Venture Forward study found that only a fifth of microbusiness owners think the government is doing enough. More than three quarters also described the cost of living crisis as the greatest challenge they've ever faced, with the price of energy the biggest single concern.
According to Andrew Gradon, GoDaddy's UK manager, microbusinesses represent 96% of all businesses within the country's private sector. “Around 42% said that they wanted support with tax incentives but also looking more broadly to business support - so looking at technical assistance for business development as well as support for digital strategy." The study estimates that if the 12% of microbusinesses under threat went under, it would wipe £12bn from the economy.