03/04/2025
It’s just a huge struggle for a lot of businesses and customers who aren’t in the know these are some challenges faced by businesses day to day to make ends meet!
Hi everyone 🙋🏾♂️
Over the last few weeks, I’ve found myself thinking a lot about the new financial year and how the upcoming changes will affect businesses from April 6th.
This month marks 5 years since the COVID pandemic. We took a decision to close our shop 6 months in. And as many of you know, I have a coffee roasting business () which I moved into doing full time.
As somebody who previously had a cafe and now supplies cafes, I think a lot about how cafe owners will be affected by the changes.
I thought it would be interesting to do a thought experiment to see what it would have cost Canvas Coffee to move from financial year 2024/25 into 2025/26.
Here are the headlines…
Come April 6th, if our old shop were open, we would have to find an extra £25,479.18 for the next financial year just to stay open (just wages and business rates)
From April 6th, it will cost a business employing staff on minimum wage £2,633.18 a year in wage increases and national insurance rises (the NI component alone is £1,031.58).
Pre-pandemic we employed 10 staff not including myself. So the impact of the changes if we were still open would be £13,173.65 a year in additional staff costs.
In addition to these labor costs, our business rates would have been going up significantly.
For some reason, the rateable value of our old shop has jumped from £26,500 to £63,000 despite being empty for 4 years.
So it would have cost us overnight an extra £12,305.53 to just pay the additional business rates that would be required in the next financial year.
I wanted to post this because I’m not sure if the general public really understand from a business/hospitality perspective what’s going on in the economy right now.
Whilst minimum wage increases for the lowest paid in society is good, the national insurance increases and business rates increases will likely result in businesses having to increase prices, and potentially cut jobs.
So next time you decide to buy a coffee and support a local business, please bear this in mind and be sympathetic of the challenges faced by business owners at the moment.