Pub landlord Graham Proud likes to take care of his locals.
During the pandemic, he made loaves of bread and handed them out – socially distanced – so he could keep an eye on his customers’ welfare.
If an elderly local hasn’t been seen at the bar for a day or so, he will check in on them. He has a loyal and dedicated group of patrons who rely on him after three nearby pubs shut down in just seven months.
In short, Graham’s pub, The Seven Stars in Rugby, is the thriving heart of the community. But now it faces closure – leaving Graham and his wife Lisa without a home – because of the cost of living crisis.
It is desperate times for the pub, which Graham has run for six years. He has taken every step possible to keep going, including selling his family home in 2020 to pay the bills. He now lives above the pub. He also took out a business loan, let the chef go and closed the kitchen to make ends meet, and even relies on kind locals who work for free behind the bar.
‘If the pub closes we won’t have a home,’ says Graham (Picture: Supplied)
‘We are now living off the house money,’ he explains. ‘But I am 60 years old. My whole working life is going to end up with me in a little flat on benefits with no money. It’s a massive worry. With the looming increase in energy bills, we are staring down the barrel of the gun.
‘No matter what, we will still have the loan to pay back. We would come out without a penny. We’ve built this business up from making a big loss, to being an award-winning pub. We are living in fear of January. That will be crunch time.’
The stress has hit Graham hard, as he adds: ‘I’ve been having counselling every week since I came out of lockdown. It is all the worry. I don’t sleep a full night. I’m drinking more – most days. It’s gone from having a 3.8% beer to reaching for the 14% glass of wine. It’s a coping mechanism. We used to go out every Monday on our day off, but we don’t do that any more because we can’t afford to.
‘If the pub closes, we won’t have a home. We’ll have no assets – nothing. I will come out without a bean and nowhere to live. I really didn’t expect to end my career with a worry like this, about whether or not I am going to have a roof over my head.’
‘With the looming increase in energy bills, we are staring down the barrel of the gun,’ says Graham (Picture: Supplied)
Graham joins thousands of small business owners around the country who are terrified about how they will pay the bills as the seasons grow cold.
Earlier this month, James Allcock, who runs a small but popular bistro in Beverley, opened an email from his energy provider.
It estimated his next annual bill would be more than £22,500. He currently pays £2,928 a year for his tiny, 22-cover restaurant. It’s an eye-watering 670% increase.
James said on Twitter: ‘I’m unsure what to actually do next but as a business that cost would now be more than I pay in rent and more than I take some months. I simply don’t have the money for this.’
This is happening to business owners up and down the UK. While the recently announced mini budget declared cuts in income tax and national insurance in a bid to help small businesses, as winter draws in, things are still looking incredibly bleak for them.
On average, bills have risen by a shocking 439% for electricity and 424% for gas, according to the Federation of Small Businesses, and 96% of business owners are fretting.
There are more than 5.7 million small-medium enterprises (SMEs) in the UK who are facing a perfect storm of increased rents, bills and costs against the backdrop of a fall in consumer spending.
One grassroots music venue – which has chosen to remain nameless – announced it would have to close because its energy costs will increase by a shocking 1340%, from £10,000 per year to £144,0000.
A Facebook post from the Music Venue Trust states: ‘Understandably, the venue had decided to simply hand the keys back to the landlord and walk away… It is not possible to imagine a scenario where the government allows this venue, hundreds of others like it, pubs, bars, restaurants, hotels, and shops, to simply close down because the business energy market has collapsed. The economic ripple of no action on business energy costs would be too serious for the country.’
The next few weeks will be critical for Ian Thursfield’s zero-waste business Leeds Refills. The shop, which sells dry goods, cleaning products and bathing bits, has been floundering throughout the year, and the coming days will be the store’s ‘last throw of the dice’, he says.
Ian says he is ‘80% certain’ his business will have to close due to the cost of living crisis (Picture: Supplied)
The father-of-three set up shop 18 months ago in an attempt to mitigate the wastefulness involved in child-rearing.
‘It was going really well until November last year,’ he tells Metro.co.uk. ‘Then January hit and you’ve got the energy crisis, the water crisis, the petrol crisis, the cost-of-living crisis and it’s just gone downhill from there.
‘Each month has been progressively worse and worse. My breakeven is only £4,000 a month. In December, I made £4,200. January was about £3,005.’
He has run at a £1,000 loss every month since, apart from May when he made a paltry £15 profit.
Ian, 34, adds: ‘Last month, I didn’t even hit £3,000. At the moment, I am about 80% certain that we are going to close. We just can’t get the customers.’
Ian isn’t being hit by energy bills yet as he’s on a fixed rate until next year, and his rent is affordable, but he says consumers are now unwilling to spend.
‘With all the different crises going on, people are tightening the purse strings,’ he explains. ‘Everybody immediately thinks about what luxuries they can get rid of. And the preconception is that a refill shop is an overly expensive shop. Yes, there are some that are expensive. But we have made Leeds Refills extremely affordable. For herbs, spices, lentils, noodles, nuts, we are a lot cheaper than the supermarket. People think sustainability is a luxury, but we have loads of offers. It’s so disheartening.’
Ian has brought in promotions and gift cards with little effect, but he refuses to do a leaflet campaign, often considered an effective way to garner extra interest in a business, given that his mission is to reduce waste.
Ian says his shop is ‘only getting nine or ten customers a day and some of them are only spending 60p a time.’ (Picture: Supplied)
The family are sustaining themselves from Ian’s wife Oren’s wage – she works full time – and their savings.
‘It’s really sad. The business will not survive this,’ Ian says with a sigh. ‘This shop is part of my soul. It’s my fourth child. But I am only getting nine or ten customers a day and some of them are only spending 60p a time.
‘I can’t sit up and worry all night about it because I can’t be absent for my kids. If the shop closes I’ll be a stay-at-home dad and have to work the gig economy, taking on the odd job here and there.’
The Accountancy partnership, an online accounting business for SMEs, had urged small businesses to not make any decisions until the recently announced Autumn budget, which offered a six-month cap on energy bills to non-domestic customers.
‘The scale of the problems that entrepreneurs are now facing is comparable to the challenges of the pandemic,’ explains Lee Murphy, managing director at The Accountancy Partnership. ‘The support from the government is certainly very welcome for the thousands of small businesses facing colossal rises in overheads this winter. While energy bills will still rise, the cap may at least help to secure the immediate future of those facing the very real prospect of having to close their doors before the year ends.
‘Small businesses are at the heart of the economy and our communities,’ explains Lee Murphy from The Accountancy Partnership (Picture: Supplied)
‘But, although the six-month cap is appreciated, small businesses are likely to need additional support to help them plan ahead, so they don’t face a cliff edge next year when it ends.’
In light of the recent announcements, Lee is now calling for a temporary 5% VAT cut, a review of tax rules for self-employed workers, and an increase to corporation tax.
‘Small businesses are at the heart of the economy and our communities,’ he adds. ‘As a country we cannot afford to leave them to face these problems without additional help and support.’
Sophia Sutton-Jones’s bakery has seen bills soar from around £1,500 a month to £5,500.
‘Our customers are very much in the same position facing a cost-of-living crisis, so adding 300% onto a loaf won’t seem right,’ says Sophia (Picture: Will Warr)
‘We refuse to pay the absurd 300% or more increase that we have been given,’ says Sophia, 30. ‘The energy company are holding us hostage in an out of contract rate, refusing to give us a new contract “Due to the market conditions” or let us leave to find a new provider.’
If she were to pass the cost on to the customer, she would have to charge £10 for a basic sourdough loaf – more than double the current price – which she knows people could not afford.
She adds: ‘Our customers are very much in the same position facing a cost-of-living crisis, so adding 300% onto a loaf won’t seem right. We’ve already had two price increases this year and with bills of up to £5,500 a month, paying the full price is not sustainable.’
‘Even with the proposed support [from the Government this week], the price for us will fall to £3,200 a month roughly which is still a 210% increase. Whilst any support is welcome, it sadly still isn’t enough.’
Sophia’s business is a real local success story. She set up in lockdown, crafting sourdough loaves from her home in Crouch End that took her area by storm, which meant she soon turned it into a thriving bricks-and-mortar store; Sourdough Sophia, which the community adores.
Astranomical energy costs will leave Sophia’s business running at a loss (Picture: Emily R Marshall)
‘We have had queues for our bread from day one,’ she explains. ‘We know most people that come through the doors; we know their names, we know their orders. It’s a much-loved business.’
By 2021 Sophia was making 20% profits – a great number for any startup – but the astronomical energy costs (bakeries require a huge amount of electricity) will leave her running at a loss.
So she’s simply stopped paying the full bills. ‘We will pay what we can, and not a penny more,’ she says.
‘We will not shut. We have taken a firm stance on this. We refuse to let energy providers dictate shutting down the small businesses that make this economy. Pressure will increase as profits and revenues will reduce significantly for energy providers so the pressure to act will mount for them anyway.
‘There have been movements such as the Don’t Pay UK movement – which I have not joined as I do pay a realistic sum – but just not what they’re asking for.’
Sophia, who is heavily pregnant, admits that if non-payment results in the business’s power being cut off, her business would be ‘screwed,’ so all she can do is hope that the Government makes some good decisions.
‘This business is our passion – we live for it,’ she explains. ‘Our entire family, me, my husband, my daughter and the coming baby depend on it – not to mention our 20 employees.
‘We are dearly loved in our community so I will give everything to ensure we will not shut down.’
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