Whatever you think about #cakegate, I think we can all agree it's not really news in itself. When I read the comments on articles written about our own company, expressing how UNnewsworthy this story is, I totally agree. I didn't know that my response, publicised for our (at the time) relatively small social media following, would go viral and then hit the national and then the global news.
Yes, it's totally surreal, and it will surely blow over soon. But what I hope doesn't blow over is the real newsworthy story: the very real daily struggle not just small business, but most of the country, are facing, and why the request we received hit such a nerve as a result.
There are three parts to this story.
One, that the small business community is overwhelmingly in agreement that this kind of request is detrimental to their businesses - even and especially when they have said yes to giving out freebies or work in exchange for "exposure".
Two, that most people - small business owners included, but not exclusively of course - are living in times when they are struggling to pay the rent, mortgage, food and energy bills, and any luxuries (such as birthday cakes) have to be scrimped and saved for if at all.
Three, that most of these people - the general public all over the world - still want to support their local businesses and value them hugely. So in fact they are choosing to pay a bit extra at times to support independents, even though it hurts their already sore wallets.
Let's take the first story. We've received hundreds of messages from small businesses this week, from the amusing to the devastating on this subject. There's the street food company who were asked to cater for 30 people for a TV production company for free - for a week - who told them they'd "best ask someone else". A Cornish bakery told me they were given a 1* review recently when a customer asked for, and didn't receive, a discount - and another guy emailed me to say his company were asked for a free swimming pool once!
More disturbingly, there were also stories of people whose business had been significantly impacted by making such agreements, including one person whose business was forced to shut down due to the financial loss caused.
Revealingly, one holiday accommodation company had this to say: "We can absolutely sympathise with the request you receive, we are often approached by ‘influencers’ and very minor celebrities asking for freebies or significant discount, something we always decline. Interestingly when we take a booking from real celebrities or film/tv locations, they are an absolute delight, never ask for discount and often leave large tips for our team." See also: the legend that is Taylor Swift giving out huge bonuses for everyone working on the Eras tour!
But the impact isn't just financial. Pricing correctly in a small business is very difficult. I know personally at least two sole traders who are afraid to work out their costs because they know they are undercharging. Many do not even pay themselves minimum wage, let alone a wage that reflects their skill level. People constantly complain about prices when you work for yourself - because there's an actual human who's there to hear it, as opposed to a faceless corporation. Every quote that's knocked back, every comment that's made, every time you press the delete button and write a lower number in there - that all adds up to a lot of emotional baggage.
So when someone slides into your DMs asking for something for "free" - for a lot of us our immediate gut reaction might be - oh, so we aren't worth it. We aren't worth what we're charging, so how could we possibly ever charge more. People don't value us. I don't value me. And so the cycle continues. And actually, this deepens the financial impact even more, ultimately.
It's amazing that despite the cost of living crisis we are in, so many people do still want to support their local small businesses. People are passionate about this! Yet unfortunately, there is literally not enough money in the pot of the average family to do this on a regular basis.
Hence insolvencies of businesses in May 2023 were up 40% from May 2022. 40%. The government report (cited below) states, "This was higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers."
2,552 companies became insolvent in ONE MONTH in Britain in May this year. That's thousands of children possibly not having a decent meal on the table. Thousands of homes being threatened. Financial stress causing damage to relationships. People losing jobs and pensions and benefits.
This has an impact on our second story - that of the general public. In the last 15 years in Britain we've gone through a period of severe austerity, followed by Covid, the war in Ukraine, the impact of Brexit and the disastrous mini-budget. Prices in supermarkets have sky-rocketed. Inflation has been above 11%. Even when inflation slows, it doesn't mean prices will drop, it simply means they won't rise as fast as they have been.
There is a vicious cycle that plays out between small business and private individuals as a result. The less people have to spend, the less they can support local independents, who then become insolvent and people are out of a job, and have even less to spend, and so on.
Meanwhile, billionaire wealth in Britain increased by £55billion to a total of £653bn, from 2021 to 2022.
So it's no wonder that #cakegate hit people in the feels. This short email exchange feels like a microcosm of what we are going through collectively. The rich getting richer, and ordinary people getting poorer. Why should anyone get a freebie when all my clients pay me their hard earned, hard fought for cash to buy our cakes for a special occasion? It's not only an insult to me and my staff, it's an insult to our loyal clients.
And the #cakegate story plays out all over the UK, and the world by the looks of my inbox, all day every day. Well, I don't regret it for a second if maybe we've put some brakes on it, even if it's just for a while.
Those are my thoughts.
https://news.sky.com/story/sunday-times-rich-list-2022-uk-has-a-record-number-of-billionaires-12617181#:~:text=The%20UK%20now%20has%20a,in%20last%20year's%20Rich%20List.
https://www.simplybusiness.co.uk/knowledge/articles/sme-insights-report-2023/?ref_id=enews_signup&utm_source=email&utm_medium=newsletter&utm_campaign=aug2023lifestylerfqns