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.
Mark Wrigley, the owner of Atlas Bar in Manchester’s city center, has voiced his frustrations at what he sees as insufficient government support. Wrigley, who has operated the bar since 2012, describes feeling “disillusioned” with policies introduced in the government’s Autumn budget. He believes these measures, coupled with escalating energy bills, business rates, and wage increases, could have devastating consequences for small enterprises like his.
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
Businesses feeling the strain across Greater Manchester
“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.
“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.”
Government stands by its economic plan
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.”
In spite of these reassurances, business proprietors such as Wrigley and Cunningham remain doubtful. Many contend that the government’s initiatives are inadequate to tackle the magnitude of the difficulties they encounter.
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.
Wrigley, for instance, is concerned about how raising prices could impact customer loyalty. “There’s a limit to what people are willing to pay before they begin seeking alternatives,” he noted. “High inflation is already straining everyone’s finances. If we raise prices too much, we’ll lose customers. But if we don’t, we’ll collapse.”
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 increased 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.
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.
