Soaring energy prices will likely force small businesses to close across the country, business owners have warned.
A music studio owner said I that he had to turn off all the ceiling lights just to bring down the cost of his bill.
Steven Carrigan, 45, Kidderminster, owns Load Street Studios, which rents out studios and rehearsal rooms to music students, teachers and musicians.
“We recently changed all the lighting from high powered fluorescent tubes to LED panels which has cut our electricity bills by £200 a month, he said.
“Then the increase brought them back up. Now, with another increase, it is very difficult to make a decent profit. »
He said the doors were open from 9 a.m. to 11 p.m. daily, meaning all eight studios were “on almost all the time.”
Mr Carrigan moved into its current larger premises earlier this year, which is three to four times larger than the previous building. But that comes at a cost: higher rent.
“We were paying 22p per unit when we moved in. It’s gone down to 45p and about to go back up to 54p,” he said.
“We have worked extremely hard to grow the business to align with the new announced increase. It works great, but with energy costs rising at such a rate, it’s really hard to work with. »
Studio rentals are their main source of income with music lessons taught by eight independent music teachers who depend on the studio for their income closely.
“We have a few [students] file and we are currently trying to arrange funding so that those who cannot afford tuition can still learn through a scholarship program.
According to the Resolution Foundation think tank, average household income is expected to fall by 5% in 2022-23, then another 6% in 2023-24.
They add that “the combination of income stagnation and the energy shock means the country is on track for two lost decades of income growth.”
Mr. Carrigan is trying to raise funds to pay two full-time teachers to provide music lessons to children and teenagers from disadvantaged backgrounds. However, the number of music students who would qualify for this funding is growing at “an alarming rate.”
Next winter will be catastrophic for households that will not follow the runaway prices. Experts say it could ravage destitute people and even cause death if government intervention does not arrive
“It’s just crazy that the government is allowing energy companies to make so much profit,” Mr Carrigan said. “They need to step up and do something as soon as possible.”
The Ofgem energy price cap only applies to domestic properties, but small businesses are calling on the government to extend it to prevent thousands of businesses from going bankrupt.
“I have 43 staff who depend on my business for funding – it’s a burden I carry. ”
Ed Collison, 27, an entrepreneur who runs The bridge and The bridge “On the Go” in Emsworth, a cafe turned restaurant, told I he was afraid of losing everything.
His gas and electricity bill for one term is around £2,500; in winter he can see that go from £3,000 to £3,200.
His restaurant seats around 80 customers who, he said I“that’s a lot of money for the size of the venue.”
But what worries him the most is the new rise in energy bills next October, which will increase the financial burden.
“If it [the rates] goes in proportion to what is projected in October, my bills will increase. We’re going from £2,500 to £6,500.
“Our industry depends on electricity and gas, we have extraction systems, ovens, fryers – they consume a lot of units per hour. In the hospitality industry, in a small restaurant like ours, you see a profit of 2-8%, which is not a lot.
But the call for the minimum wage to be raised to £15 an hour will further strain his business.
“We are currently paying above minimum wage. £15 an hour is a living wage in the hospitality industry. If £15 is the new minimum wage, then my staff’s wages will have to increase, so you’re talking about £24 an hour. I have 43 staff members. That’s a 43% increase in my payroll if everything goes up on a pro rata basis. That’s a lot of money.”
He feels one of the lucky ones being located in a relatively wealthier area with a majority of his clients retired and on large pensions. He hopes this will keep the restaurant lights on through the winter.
But as nothing is certain in the coming weeks – whether or not we will see more sufficient government support programs – he remains on a knife edge as to whether his business will survive.
“I could lose everything. You never know,” he said.
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