UK start-ups face financial strain from rising costs

Abi Selby, the founder of Spabreaks.com, has raised concerns about the challenges facing UK start-ups. She said that rising wage costs and an uncertain economic outlook are making it harder for small businesses to thrive. Selby co-founded the spa booking website 17 years ago and believes that the government needs to provide some positive support for entrepreneurs. Starting in April, UK businesses will face increased national insurance contributions, a rise in the minimum wage, and higher business rates. These changes, along with a weakening economy, have caused small firms to struggle. Selby stated, "Small businesses generally are really hurting," and mentioned that many start-ups are feeling anxious about the future. As the spring statement from the government approaches, Selby has urged Chancellor Rachel Reeves to foster a more encouraging environment for new businesses. She expressed concern that many people may avoid starting businesses due to economic pressures, stating, "It scares me that there’s a lot of people not going into business as a result." Many businesses are anticipating job losses and higher prices due to upcoming budget measures. The UK economy also shrank by 0.1% in January, according to recent reports. Selby noted that consumers are becoming more cautious, often delaying their purchases until they have a clearer idea of their spending capacity. In 2024, Spabreaks.com saw a change in customer behavior. People are looking for shorter, more affordable spa experiences. Despite the challenges, the company achieved record sales exceeding £35 million and a 24% rise in bookings compared to 2023. Looking ahead, Spabreaks.com plans to expand internationally, with Europe as its first target in 2026 or 2027. The company is also considering entering the Middle East and U.S. markets. Selby emphasized the significance of affordable wellness, stating, “Wellness is not going away, but affordable and accessible wellness is really very important.”