Small business owner is considering selling his business due to minimum wage increase

A small business owner said she is “considering selling her business” after the government announced it would increase the national minimum wage in the budget.

Christina French, 42, from Birmingham, is the founder of Diverse Sparks Limited, an electricity company, and fears she will have to sell the business to make ends meet.

She is also the co-founder of a start-up manufacturing company, which she has no plans to sell, but says she will be forced to find ways to keep the company afloat.

Ms French kept a close eye on the Budget on Wednesday, with Chancellor Rachel Reeves announcing the national minimum wage will rise by 6.7% to £12.21 an hour, after asking the Low Pay Commission to take into account the ‘cost of livelihood’.

The Employer National Insurance (NI) rate will rise by 1.2 percentage points from April next year, from 13.8% to 15%, and the secondary threshold – i.e. the level at which employers will pay tax on employees’ wages each employee – will also be reduced. reduced from £9,100 per year to £5,000.

The business owner described the changes as “nonsense” and “terrible” for sole traders.

“I am considering selling the business now,” Ms French told the PA news agency.

“It’s just terrible. My salary is the lowest. As a business owner I get paid £500 a month, and I’ve been running that business 18 hours a day for the last twelve years.

“But in order to give my staff work and keep them in a job, I will absorb the blow. Where does it now leave me as an owner and where does it leave my staff?”

She said she worries she will have to raise her prices, which could drive away her customers.

“You’re going to have sole proprietors who can charge less, so we can’t raise our prices,” she explained.

“We have already tried to adjust inflation this year and that has led to difficult times.

“I don’t see any results if I could raise my prices so I can pay my staff.”

She added that she could lose loyal customers and that she would be concerned that they would “look for people who are cheaper, and this is where standards will be lowered”.

Ms French said she is “passionate about having apprenticeships” but was disappointed the Chancellor did not include support for apprentices in the budget.

“It’s nonsense because I’ve been creating jobs and apprenticeships for the last 12 years and now that’s no longer an option for us,” she said.

“The one I have now will be the last student I can take on, so it’s quite sad.”

She fears that small businesses offering apprenticeships “will not provide that opportunity” and believes it will become “harder” for people to find skilled work.

“I get so many applications for apprenticeships because there are simply not enough jobs,” she said.

“It’s all well and good to raise the minimum wage, but then companies won’t be able to help create those jobs, so it becomes a vicious cycle.”