Small enterprises throughout Manchester are facing a progressively difficult economic climate as escalating costs jeopardize their existence. Owners in the hospitality industry, especially, are voicing worries about how the increasing expenses, coupled with governmental measures, are leading to a fragile predicament. The apprehension of shutting down is prevalent among many as they endeavor to balance soaring expenditures with shrinking profits.
Mark Wrigley, who owns Atlas Bar in Manchester’s downtown area, has expressed his dissatisfaction with what he perceives as inadequate assistance from the government. Wrigley, who has been running the bar since 2012, says he feels “let down” by the policies announced in the government’s Autumn budget. He thinks these initiatives, along with rising energy costs, business taxes, and salary hikes, could be disastrous for small businesses like his.
“I intended to grow my business by bringing in more employees and lengthening our operating hours,” Wrigley stated. “However, those plans have been completely scrapped. Instead, I’ve been forced to reduce staff hours and raise prices just to keep the business going.”
“I was planning to expand my business by hiring more staff and extending our hours,” Wrigley explained. “But now, those plans are off the table entirely. Instead, I’ve had to cut staff hours and increase prices just to stay afloat.”
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.
Firms under pressure throughout Greater Manchester
Wrigley’s difficulties are not isolated. Tony Cunningham, who owns Leckenby’s Tea Room in Bury, has characterized the present time as “the toughest in 27 years.” Cunningham’s establishment is under considerable financial pressure, with business rates scheduled to more than double in April and electricity expenses projected to climb by over 30%. Furthermore, National Insurance and wage contributions are rising by an extra 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 voiced similar worries, cautioning that numerous small enterprises in the hospitality industry have already had to shut down before April’s upcoming changes. Robert Downes, an FSB representative in Greater Manchester, characterized the situation as critical.
“Companies are getting hit hard by tax hikes, and many just can’t handle the extra expenses,” Downes explained. “Without government action to mitigate the impact, we’ll witness even more shutdowns. That’s detrimental not only for the businesses but for the entire economy. Burdening firms with steep taxes won’t foster 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 equal opportunities for high street businesses,” the spokesperson stated. “By eliminating the £110,000 cap for business rates relief, over 280,000 retail, hospitality, and leisure businesses will gain advantages. Our objective is to advance further and rapidly to foster growth and prosperity.”
Despite these promises, entrepreneurs like Wrigley and Cunningham are still doubtful. Numerous business owners argue that the government’s measures fall short in tackling the magnitude of the issues they encounter.
Despite these assurances, business owners like Wrigley and Cunningham remain skeptical. Many argue that the government’s efforts are insufficient to address the scale of the challenges they face.
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.
Wrigley is concerned about how raising prices could impact customer loyalty. “There’s a limit to what people will pay before they seek alternatives,” he noted. “High inflation is already tightening everyone’s finances. If we raise prices too much, we’ll drive customers away. Yet if we don’t, we’ll face closure.”
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.”
For Cunningham, the challenges are compounded by the broader state of the high street, where shuttered shops and declining foot traffic paint a grim picture. “When businesses close, it creates a ripple effect,” he explained. “Fewer shops mean fewer customers, which puts even more pressure on those of us who are still here.”
Industry advocates and business organizations are urging the government to take more decisive action to assist small businesses. The FSB has appealed to policymakers to reevaluate planned tax hikes and implement measures to help businesses handle escalating costs. Without further assistance, many worry that small businesses—often referred to as the backbone of the economy—will keep facing difficulties.
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 constantly putting out fires,” he commented. “Rather than concentrating on expanding the business, I’m dedicating all my time to figuring out how to make it through. It’s incredibly exasperating.”
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.
