Following this morning’s GDP data, which showed GDP fell by 0.3% in March 2023, after showing no growth in February 2023, and grew by 0.1% in the three months to March 2023, small-business owners have commented.
Their thoughts are below:
Barry Whitehouse, owner at Banbury-based art shop, The Artery: “It’s more a question of how long we have left rather than how well we’re doing. Our electricity costs are up by 70% and that’s on top of rising stock costs of around 12%-15% and other bills increasing. It is difficult to buy and replace stock as it is costing so much more than it did a few months ago. When you combine this with the increase in staffing costs and falling footfall, we often don’t have enough left each month to pay even basic bills. The two Bank Holiday weekends in a row this month hit us even harder. Online sales are non-existent, footfall in-store is down by 40% and even our art classes are now starting to decline. As a niche business, we are feeling more non-essential than ever. When it comes to our customers spending money on heating, eating or a paintbrush, the paintbrush rarely wins. We have worked hard to be a huge part of our local community over the past thirteen years, but people are now prioritising survival over art.”
Jenny Blyth, owner of London-based Storm In A Teacup Gifts: “Small businesses are fighting to survive while our government continues to act like everything is fixed and ticking along nicely. Here on the ground, in the small business community, people are shutting their doors every single day and losing something that they fought to build, and it is heartbreaking. Our customers are so incredibly loyal but we can’t expect them to support us when their own bills are rising, too, and they are struggling to put food on the table. I’m trying to be optimistic but I’m exhausted and I’ve never had to fight so hard. Use us or lose us.”
Danielle McKenny, owner of West Bromwich-based organic skincare company, Gaea’s Garden: “Official GDP numbers are meaningless compared to the hard reality being faced by the average small business on the ground. Reality is measured by the amount of money in a person’s pocket, their ability to do business, and to thrive economically. For me, none of this is possible right now. I run a business from home, making skincare and herbal supplements, and right now I cannot afford to run my dehydrators or magnetic spinners, which means I cannot efficiently run my business. I’m not alone in this as I’ve spoken with many other small business owners who are also stressing over how they are going to manage to run their businesses while the economy is in such a bad way. I paid over £450 in utilities for our home last month, and we are a very energy-efficient family. It’s unsustainable.”
Eve Scragg, founder of Bristol-based Fan The Flames Marketing & Design: “As a digital marketing agency, we’re very lucky to be working in one of the few sectors left that are still growing, but sadly we are seeing lots of our small business clients facing growing levels of pressure. Many are struggling with soaring overheads in the form of higher business rates, electricity and heating bills, which means they are simply no longer viable. Digital sectors such as ours that don’t need premises are surviving, but many companies in production or hospitality are sadly having to close their doors, and this includes those who have operated as successful businesses for decades. It’s heartbreaking to see so many years of progress lost for talented, hard-working people and I fear that, for many, 2023 is only going to get harder.”
Bradley Lay, a business finance adviser at Bradley Lay: “Such underwhelming GDP data shows how tough it is out there right now. With so many challenges facing the economy, from continuing Brexit uncertainty to record inflation and ever higher interest rates, it’s difficult to see any positives on the horizon. As we look ahead to the rest of 2023, it’s crucial to remain realistic about the challenges that lie ahead and to prepare for the worst-case scenario.”
Sam Kirk, managing director at Retford-based J-Flex Rubber Products: “Businesses have been crying out for certainty following the impact of recent global events and Liz Truss’s turbulent and, thankfully, short-lived spell as PM, and while Sunak and Hunt may not be the most popular people we do seem to have some stability for now. Whereas the outlook in previous years has been cautiously optimistic, generally speaking, 2023 feels more cautious than optimistic. That said, both of our businesses are showing encouraging signs of growth with several contracts secured from key clients already. Supply disruption has eased, although given how volatile markets can be I wouldn’t bet against further issues later this year. Cashflow is still a major challenge, with debtor days increasing beyond agreed terms. Quite often this stems from big companies dragging their feet on payments, which then has a knock-on effect throughout the supply chain.”
Carol Vickers, owner of Yorkshire-based handmade jeweller, Created by Carol: “Sales were below average at the start of the year and it was a really tough time for small businesses. But my own business, and those of other small business owners I know, are now seeing an increase in sales. Customer spending and confidence seem higher than they have been in quite a while. Long may it continue.”
Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages: “The unprecedented rise in interest rates has been exerting significant pressure on both households and businesses, posing a formidable challenge to the United Kingdom’s economic growth prospects. To overcome this, it is crucial that the government implements strategic fiscal and monetary policies, complemented by targeted deregulation measures, in order to reinvigorate the economy and foster sustainable expansion. As the UK embraces change with a newly crowned king, it may be time to consider a new Prime Minister if the current one falters in addressing economic challenges.”
Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group: “The primary challenge facing the proper market is a shortage of skilled labour in construction, which has been exacerbated by Covid and Brexit. This shortage of skilled workforce has led to increased labour costs and longer lead times, resulting in project delays and increased expenses for developers. In addition, we are also grappling with rising material costs. The cost of construction materials such as timber, steel, cement and concrete has surged in recent months due to global supply chain disruptions and increased demand. Meanwhile, ongoing interest rate hikes are causing further inflationary pressures for the sector. Higher interest rates mean greater borrowing costs for developers and property investors, which eventually get passed down to consumers, whether they’re buyers or tenants. Despite the challenges, the sector remains resilient, with demand for rental homes remaining sky-high and new government initiatives such as Help to Buy being introduced.”
