‘There is trepidation’: Why business owners like Jared are worried about their future

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Spiralling costs, high interest rates and lower spending are driving more businesses into insolvency.

Jared Merlino closed his Surry Hills restaurant and wine room Bartolo in January.Data from the Australian Securities and Investments Commission shows there were 1136 insolvencies in March – compared with 555 in January and 968 in February.The construction sector recorded the most failing businesses, with 2255 insolvencies to date in the 2023-24 financial year. ASIC defines insolvency as the first time a business enters external administration.

Owner Jared Merlino said he found Surry Hills increasingly challenging in regard to foot traffic and chose to “get out clean and pay all staff entitlements and suppliers in full before conditions worsened”.Merlino said patronage at his other venues – Kittyhawk, Big Poppa’s and The Lobo – remained at similar levels to last year, but people were spending less.

“If we want people to come out two or three nights a week, we can’t expect them to spend $120 plus each night,” he said. “We need to fit in with the economic situation and offer people value where we can, if we can.A 2024 survey conducted by Business NSW found more than one-third of hospitality and retail businesses were considering closure due to the impact of the rising cost of living.

“These initiatives highlight the NSW government’s commitment to work with small businesses on the issues they are facing,” he said. “Businesses in NSW pay considerably more for certain insurances, for example, than their Victorian counterparts, impacting on whether businesses can afford insurance,” he said.

 

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