UK GDP: reaction from small businesses and charities

Running a small charity in these times feels like navigating uncharted waters. Fundraising is tougher, volunteers are harder to come by, but our dedication to supporting disabled children and their families remains unwavering. We're not sinking, but we're definitely rowing against the tide. Both Incredible Kids Charity and the families we support are fighting the cost of living crisis with demand and costs higher than ever. Every donation and every helping hand counts more than ever.

In the last week, three of my friends have ceased trading with their businesses and they were extremely successful. Every day I'm doing everything I can to grow my business, from simple posts on social media to undertaking a huge rebrand (which has done absolutely nothing in terms of revenue). The Government has done absolutely nothing. They could have done so much, but seem to have forgotten that this country is built on micro and small businesses. It’s getting to the point that I can't keep running my business. I just have no energy left to keep fighting.

I don't know if my business will get through to Christmas at this rate. It's as if people have stopped spending on personal care so they can waste it on "bargains" on Black Friday. As for government support, there is none. It's crunch time for many small businesses, and a lot of my friends who own businesses are desperate for help with bills or cash flow. I have no hope the Tories will support any business that is not in a position to throw thousands at their political election campaigns.

I am seeing businesses close left, right and centre, and a Government that seems to care very little. Two in five small firms saw revenues fall during the third quarter according to the Federation of Small Businesses, while only one in three saw an increase. Hospitality businesses had the lowest level of confidence. A nation of small businesses cannot be ignored and left unsupported. We will be heard. We need tax breaks to invest in the skills and training of our staff; we need the business rates discount for retail to be extended, as it is dire out there, and we need the Government to crack down hard on late payers, including its own departments.

One of our businesses, Yorkshire in Business Limited, and a partner business, have recently lost £50k owed by a government-appointed contractor that went bust. Thirty years of campaigning for #PayIn30Days or less — asking the Government not to work with, fund, buy from or contract with a few hundred of the biggest, sector-leading, most profitable companies in England unless they #PayIn30Days or less ALL their bills ALL the time — is pathetic. Unfair payment terms (45 - 120 days), non-payment and delayed payment of goods and services satisfactorily delivered cause serious debt and depression. Our partner closed their business with a loss of jobs. Not getting paid promptly is added to our daily struggle with unfair basic business costs - utilities, rates, travel, transport, broadband, cost of regulatory compliance, card transactions etc. Many of our micro-business owner colleagues are seeking jobs. This is not normal - other countries value micro (0-9 employees) businesses.

Tough doesn't begin to sum it up. Small business owners all over the country are facing a perfect storm of rising costs, falling sales, and higher taxes. Unfortunately, the fate of these businesses lies in the hands of politicians more concerned with their own survival ahead of the election next year, than those of the once-famous "nation of shopkeepers".

While there has been a real shift in supporting local smaller stores like BiNibabies it’s still difficult to compete with larger high street brands that have the structures and cash flow to slash their prices for the same or similar products. Import duties and taxes for high quality goods from Europe are way too much. Any small business like us is finding it difficult to offer a wide selection now. Two years on from the pandemic, the cost of living crisis means my business still can’t plan ahead with any degree of certainty. It feels like the blows never stop coming.

Overall in the FMCG sector, we are seeing lower levels of spending across the board. When consumer goods sell at lower rates, it's a weathervane for the general economy. People just have less cash to spend. Meanwhile, in discussion with a business-to-business client this week, we observed more conservative rates of sale in a year-on-all-previous-years comparison. Although spending hasn't completely fallen away, we concluded that there is a general ambience of caution. Those who have money to spend are coasting towards their year-end, which means that budget setting is right around the corner in January 2024. If we rewind 12 months, the media was in a frenzy that we were about to enter a 5-quarter recession, which was then declared in January 2023 as not being the case. The bounceback was remarkable, and so I believe that businesses are biding their time to see how January feels.

October saw the highest revenues in the company’s history, all be it by only £1. Companies that continue to market themselves appropriately, provide great service that makes customers want to return, and are selling a service or product that people place a value on can still thrive.
The more discretional your product or service is, of course the more you are at risk of economic cycles. Many of my customers have had huge pay raises in the last two years since their mortgage was last reviewed. Although there are many people out there struggling, there are many who people did not overstretch themselves when interest rates were at record lows and have coped with increases back to more normal interest rate levels without too much discomfort.

Being in the secondhand market does have its bonuses when it comes to the cost of living crisis and people's reduced spending power. In the third quarter, we saw an increase in people coming to buy preloved items across all verticals, from furniture and tools to clothes and toys. However, in line with Curry's recent research which states that 36% of Brits are likely to purchase secondhand tech while shopping on Black Friday and for Christmas, we are already seeing a better conversion and more activity now compared to this time last year. Our customer research reveals people are planning ahead this year and are considering secondhand more seriously as a response to rising costs elsewhere.