Which businesses are going to go under?

[Nobledeedsandhotbaths]

I've been thinking about the upcoming crisis and wondering which 'non-essential' businesses are likely to lose most custom once things begin to bite.

Things like:
Tattoo artists
Nail technicians
Children's party entertainers
Just for a few examples.

There are many others I would class as non-essential that will potentially be ok because their client base is the wealthy, who will be less affected by what is going to happen.

What are other people's predictions for businesses that may struggle?

Thinking back to the two last recessions I remembers in 1992 and 2008 it was mainly because people couldn’t afford mortgages and house prices crashed ( meaning even the rich were technically less rich in assets) However people who weren’t well off enough to get a mortgage were largely fine.

This recession seems to be hitting the poorest whist the better off can push through with assets and savings.

There is usually some benefits to recession for the enterprising. In the early 90’s banks bought out 95% mortgages to support the industry and even on my small wages I could have afforded something. It will be interesting to see what comes out of this one..

There are also great swathes of people who don't have to worry about COL increases

Many of those affluent people make their living from their business AND have high debts (mortgage for big house; credit, loan for fancy car, premises rent). Which means they are totally reliant on punters, customers, spending money on their product. If your product is something people don;t HAVE to buy ( a new kitchen, suit, handbag, holiday, luxury food) then suddenly you don't sell enough to cover your own rising debts. Trust me, many high earners have high debt and are at high risk when reduced profit coincides with rocketing interest rates. Sell the house/cars and downsize? Sorry, the market for huge gas guzzling cars and houses with gigantic mortgages and heating costs. is likely to nosedive.

In the main it will be non essential purchases that will suffer most - non food retail, I am particularly worried about.

Anything that is paid by direct debit will all be scrutinised EG. Gym membership, streaming services - Netflix, amazon, Disney +, mobile phones

Holidays in general - domestic or abroad

There will be a 'lipstick effect' where people will treat themselves with little treats, this could be a posh flat white or trading up to some top tier biscuits

I suspect the ‘eco’ shops that sell hugely expensive environmentally friendly cleaning products and what have you are going to be in trouble. Few people are going to carry on shelling out £5 for a bottle of surface cleaner when you could get a supermarket one for £1.

The backlog in projects is at least two years to just maintain what needs to be done to keep the business rolling at the moment. I agree new implementations might be put on hold, feasibility studies parked but there were so many upgrades due 20 years from when the last boom that Should have took place in 2020 that is still ongoing now due to skill shortage is everything is taking 10 times longer. IT be fine for the next 2 to 3 years.

I think people should also be careful not to slit their own throats if that little shop selling gifts goes out of business because you’re tightening your belt, That means that the council aren’t collecting council tax from that business the knock on effect is that yours will go up to compensate we are all a huge ecosystem that are reliant upon each other and whilst I’m not saying go and buy trinkets you don’t need. I will definitely still continue to post birthday cards, to have lunch out once a week when I’m in the office at an independent shop, use public transport where I can. We need to oil the wheels otherwise they fall off.

Superspender · Today 00:46

Hairdressers... Ours have up their prices this year three times... Fair enough they have to look after their bottom line but I need to look after mine too. My priorities are heating my home & feeding my kids so I've cut out the hairdressers completely & do my own colour, 5 quid a box., can't tell the difference...

With you all the way on this! I stopped paying silly money for colours years ago and use a home colour box for £5 every 6 weeks. I went to the salon for a cut and paid £32 for a dry cut which took 40 mins -( I asked if it had gone up and she said no) and she commented how good the colour looked! So I won't ever be paying extortionate colouring prices again.

I'd love to be able to colour my hair at home but I can't get the colour right so the hairdressers will be the last thing to go for me as I refuse to go grey gracefully. I did it myself with box colour during lockdown and it looked bloody awful and took months to get right when the salon reopened!

Hairdressers are generally regarded as ‘recession-proof’. Apparently having a haircut is one of the last things people will give up on.

The thin

Yes. Mean sprited thread.

I absolutely think discretionary spending will be hit.

If a general increase in your cost of living has gone up in all areas by 15%, that is a big jump.

From fees, food, extracurricular activities etc., all up at least 15% -20%, not to mind utilities.

My last electricity bill at the height of summer, little cooking, no lights on, mostly for showers, was eye watering.

I can only imagine what it will be like with the whole house lit up from 4pm during winter, and normal winter month life going on.

I can absolutely see myself on shower patrol🙄😁with the length of showers taken in this house!🙄

Sorry...
The things the op has suggested, ie having tattoos, getting your nails done , I have never done, but I suspect they won't 'go under' because ppl find the money for them. Possibly the same ppl who grumble about the cost of living.

I work across a number of sectors and here's my observations of what's happening now:

Manufacturing; full order books but so many issues with Brexit admin, freight costs, material costs, sourcing materials, recruitment that they can't translate the orders to invoices. Utility bills adding to woes.
Luxury outlets: i.e. high end kitchens, arty retailers, "hobby" retailers- busier than ever
Construction: little impact so far. Costs are passed on to end users (eg house prices, councils, multi-national property investors)
IT providers ; busy than ever but skill shortage
hospitality: struggling badly - good season this year but not as many forward bookings as previous years. Staffing is at crisis point. Food costs are rocketing and there's a limit as to what can be passed on to menu prices
Leisure - utility costs will close many down - soft play, cinemas, gyms, bingo halls. People want to be somewhere that's warm and comfortable. Turning the heating down a notch will mean customers stay at home.
Recruitment - booming
Food production - booming

My friend is a child’s face painter. She mostly works around Kensington and Chelsea. She will be fine.

It will depend on your clientele rather than what you do.

I work in manufacturing and cash flow is an issue. Material costs have gone up thanks to Brexit and some retailers are struggling to pay invoices leaving us out of pocket.

Fish & chip shops (oil, fish & potato costs) Pottery painting workshops (high energy costs)

I can’t see how nurseries will survive it without the funding rates being dramatically increased or passing astronomical fee increases onto parents.

Nurseries are (1) not VAT exempt, but can’t charge VAT, so everything costs 20% more, (2) have to employ 10 x the number of staff as a comparable size business in terms of turnover (eg, a small shop) and (3) have to pay rents that are on average 10 x the price of a comparable business.

Unrealistic funding rates, minimum wage and the requirement to pay pension contributions for all those staff means that profit margins are already tiny. These utility rises will wipe them out.

I think they will destroy the childcare sector.

The OP has asked a valid question. There's nothing morbid about it. Do those that find it uncomfortable really think that business owners aren't asking themselves the same question? Closing your mind to what's happening doesn't stop it happening.

I work with SMEs and micro-businesses. I'm asking myself this question, thinking about what lessons can be learned from previous recessions/downturns, and what it is about this coming recession that's different and may mean the consequences are different.

The principal difference this time around is that it's being driven by increases in energy price that are almost inconceivable. You can get your head around a 15-20% increase in energy costs, but when it's 400-800% it's not something that you've ever considered in your business plan.

Normally the greatest number of business failures is on the other side of a recession, when things start to pick-up. This time around we may see more closures early on, and there will be some surprises for the public when they see which businesses local to them start to close.

What an absolutely horrible thread.

Going back to when lockdown lifted there was i hude queue going down the street. I was gobsmacked to see that it was for a tattoo parlour. But there you go.

I normally book my nails in for redoing after my appointment and have never had a problem getting another appointment in 2 weeks time. Last week I was advised to book a few appointments (so booked the next 3 appointments in one go) because they are busier than ever.

Pressed post too soon.
So I don't know about nails closing down.

However, soft play centres and clubs (yoga, boxercise etc) are closing up around us.

I wonder whether this will change with the current and apparently long-lived fashion for long hair on women, though? In the 80s recession loads more women had short hair, which needs cutting every 6-8 weeks. Mines currently very long, and lockdown really taught me that I don’t need it cutting more than once or twice a year. Lockdown also showed many people what they can do without at a salon (eg all the women on this thread who have started doing their own colouring).

Incorrect.
Every vegan gobshite cafe will close down in the next 3 months.

😆😂