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.
Small businesses across Manchester are grappling with an increasingly challenging economic environment as mounting expenses threaten their survival. Business owners in the hospitality sector, in particular, are raising concerns over how rising costs, combined with government policies, are creating a precarious situation. For many, the fear of closure looms large as they struggle to reconcile higher expenses with declining margins.
“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 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.
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 experiencing pressure from every direction,” Cunningham remarked. “For businesses like mine to endure, increasing prices seems necessary, but it may drive customers away. It’s a never-ending loop.” He also highlighted that the surging costs could result in more vacant storefronts on high streets, further damaging local economies.
“We’re being hit from every angle,” Cunningham said. “The only way for businesses like mine to survive is to raise prices, but that risks turning customers away. It’s a vicious cycle.” He also pointed out that the rising costs could lead to more empty shops on high streets, further harming local economies.
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.
Government stands by its economic plan
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.
A Treasury spokesperson has defended the government’s approach, emphasizing its focus on boosting economic growth and supporting high street businesses. The spokesperson highlighted measures such as permanently cutting business rates and capping corporation tax for the duration of the current Parliament.
“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
In Manchester, for small enterprises, the mix of increasing expenses and economic unpredictability is creating a critical situation. Proprietors are compelled to make tough choices, such as reducing employee hours and hiking prices, to remain viable. However, these actions involve risks, and many are concerned that the strain may 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.”
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.
On the other hand, the government maintains that its strategies aim to promote long-term growth. By reducing business rates and offering targeted relief, officials believe they are assisting businesses in navigating the current challenges. Nevertheless, critics claim that these actions fall short of tackling the immediate financial strains that small companies are experiencing.
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.