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 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 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.
Despite his disappointments, Wrigley is resolute in his effort to keep his business operational, for the benefit of his 28 employees who depend on him. “I’m deeply concerned about what’s ahead,” he noted. “But I must remain optimistic because numerous individuals rely on this business.”
Companies 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 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.
“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.”
Government stands by its economic plan
Government defends its economic strategy
“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.”
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 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.”
Demands for additional assistance
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.
Business groups and industry advocates are calling on the government to take more decisive action to support small businesses. The FSB has urged policymakers to reconsider planned tax increases and introduce measures to help firms manage rising costs. Without additional support, many fear that small businesses—often described as the backbone of the economy—will continue to struggle.
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.