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 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.”
Wrigley calculates that the overall effect of the newly implemented government policies and increasing expenses could boost his business costs by an additional £55,000 this year. This encompasses increased employer National Insurance contributions, an elevation in the National Minimum Wage, and skyrocketing energy charges. “For several weeks, I found myself overwhelmed, pondering how we could possibly manage to make ends meet,” 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%.
Wrigley’s challenges are not unique. Tony Cunningham, the owner of Leckenby’s Tea Room in Bury, has described the current period as “the most difficult in 27 years.” Cunningham’s business is facing significant financial strain, with business rates set to more than double in April and electricity costs expected to rise by over 30%. On top of that, National Insurance and wage contributions are increasing by an additional 10%.
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.
The Federation of Small Businesses (FSB) has echoed these concerns, warning that many small firms in the hospitality sector have already been forced to close their doors ahead of April’s changes. Robert Downes, a representative for the FSB in Greater Manchester, described the situation as dire.
“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 supported the government’s strategy, stressing its aim to enhance economic growth and aid high street enterprises. The spokesperson pointed out initiatives like permanently reducing business rates and capping corporation tax for the duration of the ongoing Parliament.
“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.”
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.
A precarious future for small businesses
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 condition of the high street, where closed stores and reduced foot traffic paint a bleak scenario. “When businesses shut down, it causes a domino effect,” he explained. “Fewer stores lead to fewer customers, increasing the 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 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.
