As the cost of living continues to rise, more and more small business owners are being forced to make drastic changes to keep their business afloat.
Individuals and families are cutting back on shopping, postponing summer holidays and cancelling their Netflix subscriptions – but such changes are not as simple for business owners.
Financial advisor Ian Dempsey said: “Businesses are being squeezed just as much as individuals with the potential impact being much bigger.”
According to Mr Dempsey, one of his clients has been forced to put their business on hold due to shipping costs increasing from £2,000 per container to £26,000.
This is something that affects thousands of businesses – they are juggling many different cost increases to keep their doors open, including raw materials, petrol, gas and electric bills as well as the increase in National Minimum Wage for staff.
Sarah Laker owns two stationery shops called Stationery Supplies – one in Marple and one in Wilmslow.
She said: “The footfall is still the same coming into the shops, but people aren’t spending as much – they are making more considered purchases meaning that our profit margin is much smaller.
“I can’t think of an area of the business that hasn’t been affected.”
Laker said her business struggled through Brexit and the Covid-19 pandemic, before the current cost of living crisis.
The UK government is helping individuals on certain benefits – such as providing a payment of £650 in two lump sums to those claiming Universal Credit, Jobseekers Allowance or income support – but there are no such benefits for businesses.
Data from the Office for National Statistics showed a 9% inflation rate rise between April and May 2022 – the largest the UK has seen since 1982.
Lisa Johnson, owner of Wilmslow based organic skincare business LJ Natural, worries about when this is going to end.
She said: “I’ve had my business for 12 years and it’s changed a lot in that time, but this is probably the worst it’s ever been.
“If things don’t pick up, I’ll have to cut my business down to two or three days a week and get a job on the side which I don’t want to do but I’ll have to. “
Mr Dempsey explained how his main worry was the human impact that the cost of living will have.
He said: “Businesses are run by families with mouths to feed and without any income, that impact could be significant, when we are already in a delicate recovery after the unprecedented global pandemic.
“Recessions close businesses, people lose homes, and that is not a position I wish on anyone.”
