Get ready for lots of closures

[KittyCatsby]

I don't run my own business / shop /cafe / hairdressers etc , but alongside my own personal concerns for the energy crisis for my home , I'm wondering how you that do have a business are planning on getting through this ?
I'm sure a fair few of you are getting to a point where you must have the worry of paying for your own home plus the business.
For us out there that still are able to treat ourselves to a coffee & cake or a beauty treatment , please think of your independent retailer as the phrase ' Use them or lose them ' has never rung so true.

I am a hobby baker & follow a lot of microbakers. There's at least one post a day now from people shutting up shop. It's sad as survived the pandemic but this is equally as bad, if not worse, as everyone will be affected. Even if you are well-off, if society ceases to function, you're stuffed.

I think it’s going to be a gradual grind to the economy. First of all those who can not afford the increases at all will be hit hard first (low incomes, benefits and fledgling businesses). Then I think things will get worse once the disposable incomes of millions starts to shrink massively, the ones who have charity direct debits, nail and hair appointments, visit cafes and restaurants, have weekend stays away- suddenly all those expenses become considered and likely get cut back.

Also as everything looks likely to get buggered up with strikes this autumn, people will stop planning Stuff because of potential for disruption, and then may well not return because they'll either be flat broke or feeling the pinch

That said, dawdling on minimum spend in coffee shops saves on your home heating bills. Problem for the shop is that you're an unprofitable customer

I have 3 friends who have (separate) small businesses and they are so worried. I bloody well hope whichever of the two desperados end up running the country have something up their sleeves to pull out and help businesses. Neither of them seem to have any sensible ideas so they’re not holding their breath. It’s awful to think of people who have built up a viable business, which is incredibly hard at the best of times ), watching everything go down the pan.

I might be being really nieve, but I just can't see how whoever ends up being PM can get away with just cutting taxes and VAT. I'm presuming some significant help is coming, for both households and businesses. Don't get me wrong, I have very little faith in the government, and I'm sure it'll still be a massive mess, but I can't see how they could possibly not do something significant. If they don't, they will completely wreck the economy. It would be like a lockdown, without the financial support for a lockdown. It'll probably just be as haphazard as furlough etc, with some falling through gaps, but I can't see how they can avoid doing something akin to furlough. The number of businesses who will close because they can't afford their energy bills, and the number of households who would just stop spending, will be so very significant. I don't think even the Tories are stupid enough the let that happen. It's just frustrating that we're in the middle of a Tory leadership contest so that seems to be preventing them from announcing anything, but there's only so long they can hold off for, before the markets tank too. And Tory
members won't be very impressed with that, so some announcements need to be made relatively quickly.

Also, if small businesses close, the behemoths like Tesco/Premier Inn/Primark will just end up with more and more business/profit. The big companies will be better able to weather the storm and will have more power at the end of it, leaving the consumer with less choice through less competition.

We try and use small local businesses for food and the occasional meal/drink out but I know they are struggling.

There have been quite a few articles recently about restaurants and pubs with ££30k+ heating bills, however very little about leisure. I run a fitness studio, 2800 sq ft, think something like a small rock climbing centre, 6 target archery range or axe throwing type place type size. Estimated heating bill to keep it just at 16C through the winter is £52k. That's about 70% of our annual turnover, significantly more than we make in profit in an entire year even if I took no wage at all. So what are my options? Telling people we are now unheated, wear lots of layers and apologies if you needed to be able to feel your fingers to take part? Close up for 5 or 6 months (we're in the north so it'll be averaging about 0-3C November-Feb) but how do we pay our rent if we're shut, and we'll have to let our staff go and then as it's a niche activity we may not be able to find anyone available and qualified in Spring, or do we just fold if there is no news by October on how businesses can stay open? I'm genuinely at a loss for what to do atm.

I am so sorry to hear this. I know its no comfort to know that so many people are in the same dire situation.

I really hope that there is some help for you.

@VikingsandDragons really sorry to read this. I hope the government pay attention.

Speak to your local Chamber of Commerce. They won't be able to help, but they are trying to make the case that support is needed and they need examples of how different types of business are being affected.

Expect some sort of package of measures to be announced very shortly after the new prime minister is named on Monday. But I don't expect it to be enough, or based on a genuine understanding of just how different the approaching crisis is to recessions that have gone before.

I’m not sure what significant help they even could provide. Debt is far more expensive after the interest rate rises, there’s little appetite for more British debt on the markets, and the cupboard is bare. If the government pays most of the energy bills, people will keep using more and shortages are more likely.

I read this morning about care homes closing due to the high bills even though many charge the earth a bill going up 80 percent then more ( in fact businesses don’t even have capped rates)

It’s not just hospitality and hairdressers/beauticians is it. I’ve read about music venues and theatres that may close. It’s literally anyone that needs electricity and or gas. Schools have to pay out of their budget which is very low these days to the point that they don’t always recruit new staff or can’t pay the pay rises. Nurseries especially smaller ones have to keep a warm building for the kids too.

Write to your MP @VikingsandDragons. I think we all need to start making some noise about this not meekly accepting it.

The manufacturing business near me that has 450 employees has just announced a load of redundancies.

It's going to be catastrophic. I don't see how the government can possibly help the sheer numbers of households and businesses that will need help to survive. They are already paying out 1k and even more to those on pension credit to pensioners with the increase in winter fuel payments etc. A pensioner over 80 on pension credit will this winter be getting £600 winter fuel payment + £650 cost of living payment + £400 household payment. So £1600 just for one household. Surely there cannot be more on top ( although I appreciate it may be needed). The country will be bankrupt if they start having to support the squeezed middle and businesses on a large scale too. Then again what is the alternative ? Very scary stuff.

My own business will probably be ok. I have clients who have said they are able to continue and are very keen to do so. I also have a waiting list. I work mostly from home though so my overheads are smaller. I have recently invested some money in the business but probably won't do any more until at least the spring.

For other types of business things will be terrible and we are keen to support local ones where we can.

I’m in the food business and I know loads of people who are considering shutting down. People are moving to tariffs 350% above what they are on now and facing bills that are higher than turnover and the price of food is through the roof but it can’t all be passed on to customers. By the time you’ve bought stock, absorbed the squeezed margins because of food inflation, paid the utilities and VAT at 20% of your turnover then there is literally nothing else for rent let alone wages. I don’t know what will happen to leaseholders, I guess they will have to go bankrupt because they won’t be able to pay rent. Then it’s a domino effect to freeholders and commercial property will be worth zilch.