Image credit: CNBC
SAN ANTONIO – As if last year wasn’t already hard enough on small businesses during the pandemic, inflation has jumped to 7.5% from 6.2% last November, the highest level in 40 years.
Contending with higher costs and often thin profit margins, “There’s just no room for the small business to swallow that,” said Stephanie Scheller, founder and CEO of Grow Disrupt, which offers events, programs and resources for small business owners.
“I don’t know any that have had to shut doors, but I know quite a few that have had to get additional loans because they didn’t react quickly enough,” Scheller said.
She said many business owners are increasingly anxious about passing on the higher costs to their customers and clients, while others who already have been are wondering if they should do it again.
Kelly Smith, owner of LeapFrog Productions, which markets promotional products, said, fortunately, his clients understand why he has no choice but to pass on the higher costs he has to pay now.
But even so, Smith said, “They don’t like it, and we don’t like it.”
To try to make it up to his clients, Smith said he’s gone back to the basics.
“You treat them like family, and you go out of your way to please them and make it as easy for them as you can,” Smith said.
Scheller said Smith is on the right track.
“Look for the ways that you can add value to your product or your service,” Scheller said.
But to begin with, Scheller said business owners should evaluate their margins every month, not once a year.
“You need to know ahead of time, ‘Hey, we’re starting to get out of our comfort zone,’” she said.
“The goal would be to recognize that you’re running out of runway before you get to the end of it and have to go try and get a loan,” Scheller said.
Source: https://www.ksat.com/news/local/2022/03/04/record-inflation-now-even-harder-for-small-businesses/