This post was originally published on this site.
A successful hospitality entrepreneur has called on the government to tackle the constantly rising costs that businesses are facing, or risk seeing founders leaving the UK.
Jayke Mangion, originally from Australia, is the co-founder of JMHG Group, a collection of cafés, bars, and restaurants in South West London with 70 employees.
He was speaking in Parliament at the launch of a new report on entrepreneurship by Block, the company behind services including Square and Clearpay.
Addressing attendees at the event, Mangion said his cafes are actually “busier than ever”, with “queues outside the door”. However, he said despite the “demand” and “energy”, “it’s getting harder and harder for profits to filter to the bottom line.”
He said: “Every bit of our growth seems to be swallowed up by rising costs of what seems like everything. It isn’t a rough patch. It doesn’t feel like a seasonal dip, but more of a structural failure.
“Since April 2024 every cost has gone up. Our VAT, PAYE, energy and supply costs have all risen at once. Every lever is being pulled upwards, and the only thing going down is our margin, our resilience and our confidence.
“What used to be light hearted ‘should we move to Dubai?’ dinner jokes are now overheard daily in my cafes in southwest London among working families. They’re not elite families either.
“None of us want to leave this great country, and it’s pretty scary when people feel that they must look beyond these great borders for more of a fair go.”
Mangion’s expression of concern follow criticism by business groups that the chancellor’s business rates reforms in November’s Budget aimed at cutting costs will actually lead to business rates bills rising by £318 million for hospitality and retail firms over the next three years.
He continued: “The hospitality model under its current pressures is really challenging. In hospitality, we accept slim margins, we innovate constantly, and we’re always fighting fires daily. The optimism doesn’t pay the wages, the creativity doesn’t pay the VAT.”
As for what needs to be done to tackle the challenges, the entrepreneur said:
“A VAT system that feels like it’s not punishing growth, PAYE obligations that don’t turn hiring into liabilities, business rates that reflect the real world and not one from the past. Access to finance with companies like Square and Block that are real, not on paper, and are quickly accessible. They have saved my bacon a number of times.”
Concluding his speech, Mangion said:
“Unless we can restore the basic liabilities, we will continue to see businesses under huge pressure, and more good operators questioning their future.
“I’m really grateful what the UK has given my family, and I’m proud of the businesses that I’ve built, but pride doesn’t keep the business open. Practicality and policy does.
“If the government wants an entrepreneurial revolution, it must support the entrepreneurs that it already has and not drive them away. We’re not asking for miracles, just a fair chance to succeed.
“I’m determined to ride this out and do everything in my power to turn things around, but I’ll be honest, the next chapter already feels tougher than anything we faced during COVID. When the numbers tell you month on month that things are getting harder and harder through no fault your own. It’s not pessimism to say so, it’s realism, and realism is the only way that we fix this.”
