Small enterprises throughout Manchester are facing a more daunting economic climate as escalating costs endanger their viability. Entrepreneurs in the hospitality industry, specifically, are expressing worries about how increasing expenses, alongside government policies, are putting them in a difficult position. For numerous businesses, the threat of shutting down is significant as they work to balance higher costs with shrinking profits.
Mark Wrigley, who runs Atlas Bar located in the heart of Manchester, has expressed his dissatisfaction with what he perceives as a lack of adequate support from the government. Having managed the bar since 2012, Wrigley shares feeling “disheartened” by the policies presented in the government’s Autumn budget. He thinks that these actions, alongside rising energy prices, business rates, and salary hikes, might lead to severe effects on small businesses like his own.
“I intended to grow my business by bringing in additional employees and extending our operating hours,” Wrigley stated. “However, those plans have now been completely shelved. Instead, I’ve been forced to reduce staff hours and raise prices simply to keep the business running.”
Wrigley calculates that the overall effect of new government measures and increasing expenses might increase his business costs by an additional £55,000 this year. This amount covers the rise in employer National Insurance contributions, an increase in the National Minimum Wage, and surging energy bills. “I spent weeks with my head in my hands, questioning how we could possibly manage,” he confessed.
Wrigley estimates that the combined impact of new government policies and rising costs could add an extra £55,000 to his business expenses this year. This includes higher employer National Insurance contributions, a rise in the National Minimum Wage, and soaring energy bills. “For weeks, I found myself sitting with my head in my hands, wondering how we could possibly make it work,” he admitted.
Companies under pressure throughout Greater Manchester
Wrigley’s difficulties are not uncommon. Tony Cunningham, who owns Leckenby’s Tea Room in Bury, has called this time “the toughest in 27 years.” Cunningham’s business is experiencing major financial pressure, with business rates slated to more than double come April and electricity expenses anticipated to climb by more than 30%. Additionally, National Insurance and wage contributions are rising by another 10%.
“We’re facing challenges from every direction,” Cunningham remarked. “For businesses like mine to endure, increasing prices seems to be the only option, but that could deter customers. It’s a relentless cycle.” He also highlighted that the escalating expenses might result in more vacant shops on high streets, causing further damage to local economies.
The Federation of Small Businesses (FSB) has mirrored these worries, cautioning that numerous small companies in the hospitality industry have already had to shut down before the adjustments in April. Robert Downes, an FSB representative in Greater Manchester, described the circumstances as critical.
“Businesses are being hit hard by tax hikes, and many cannot handle the extra expenses,” Downes stated. “If the government fails to act to alleviate the impact, we’ll witness even more shutdowns. That’s negative not only for the businesses but for the economy overall. Burdening companies with high taxes won’t result in growth.”
“Businesses are being hammered by tax increases, and many simply can’t absorb the additional costs,” Downes explained. “If the government doesn’t take steps to cushion the blow, we’ll see even more closures. That’s bad news not just for the businesses, but for the economy as a whole. Punishing firms with high taxes won’t lead to growth.”
A representative from the Treasury has justified the government’s strategy, underscoring its emphasis on promoting economic growth and aiding high street enterprises. The representative pointed to actions like permanently reducing business rates and capping corporation tax for the current parliamentary term.
“We’re creating a fair environment for high street businesses,” the spokesperson stated. “By eliminating the £110,000 cap for business rates relief, over 280,000 retail, hospitality, and leisure enterprises will gain advantages. Our aim is to move further and faster to inspire growth and prosperity.”
“We’re leveling the playing field for high street businesses,” the spokesperson said. “By removing the £110,000 cap for business rates relief, more than 280,000 retail, hospitality, and leisure businesses will benefit. Our goal is to go further and faster to stimulate growth and prosperity.”
An uncertain future for small enterprises
For small enterprises in Manchester, the blend of rising expenses and economic unpredictability is forming a perfect storm. Owners are compelled to make tough choices, such as reducing staff hours or increasing prices, to remain viable. However, these actions carry risks, and many worry that the pressure might eventually become overwhelming.
For small businesses in Manchester, the combination of rising costs and economic uncertainty is creating a perfect storm. Owners are being forced to make difficult decisions, from cutting staff hours to raising prices, in order to stay afloat. However, these measures come with risks, and many fear that the pressure may ultimately prove too great.
For Cunningham, the difficulties are intensified by the overall situation of the high street, where closed shops and dwindling foot traffic present a bleak scenario. “When businesses shut down, it generates a ripple effect,” he explained. “Fewer stores result in fewer customers, adding even more strain on those of us who remain.”
Demands for increased assistance
Calls for greater support
The government, on the other hand, maintains that its policies aim to promote long-term growth. By reducing business rates and offering targeted relief, officials believe they are aiding businesses in enduring the current challenges. However, critics contend that these actions do little to alleviate the immediate financial strains impacting small companies.
For Wrigley, the unpredictability about what lies ahead is one of the toughest parts of the present circumstances. “It feels like we’re perpetually in crisis mode,” he remarked. “Rather than concentrating on expanding the business, I’m dedicating all my time to figuring out how to endure. It’s immensely frustrating.”
For Wrigley, the uncertainty surrounding the future is one of the most challenging aspects of the current situation. “It feels like we’re constantly firefighting,” he said. “Instead of focusing on growing the business, I’m spending all my time trying to figure out how to survive. It’s incredibly frustrating.”
As small businesses across Manchester and the UK navigate this difficult period, their resilience will be tested like never before. Whether they can adapt and thrive in the face of rising costs and economic uncertainty remains to be seen. For now, business owners like Wrigley and Cunningham are doing everything they can to keep the lights on, even as the odds seem increasingly stacked against them.
