Small business owners, under pressure, are now more gloomy about their economic future
According to the NFIB index, expectations for improving conditions have worsened every month this year.
“Without a doubt, there is a small business community that is very concerned about what the next six months will look like,” NFIB State Director Roger Geiger told this outlet.
Small businesses in Ohio are facing a “triple whammy” of runaway inflation, struggling to fill job vacancies and increasingly daunting supply chain issues as they struggle to deliver goods and services to their communities, Geiger said.
Just over a third of small business owners say inflation was their biggest problem running their business, up six points from May and the highest level since the fourth quarter of 1980 .
“For small businesses that are not in the world of wholesale purchasing, they don’t have much bargaining power for the items they use in the delivery of their services or products, so they pay the higher costs” , did he declare. “Inflation is very real for them.”
Winston Heat Treating, which has been in Dayton since its founding in 1967, issued its first price increase last September in about four years, Reger said.
Meanwhile, since last August, the cost of some of the gases used by the company, such as liquid nitrogen or natural gas, has increased by another 20% to 50%, he said. In addition, the rising price of gas at the pump has aggravated transportation problems for the company.
“He’s really trying to absorb (those price increases) on all fronts without shifting the blame to the customer, because they’re also price conscious and can’t always absorb those costs,” Reger said. “Our customers are also experiencing huge price increases on steel (and) all of their various services as well. It’s kind of a vicious circle where everyone wants to raise the price, but you’re not always able to pass that on to the end user.
Supply chain issues are creating inflationary prices that are “out of control” for small business owners, including everyone from small manufacturers trying to buy inventory, to the entertainment industry needing to increase prices. admission and attraction prices for small restaurateurs trying to find food. . , he said.
“It’s a challenge on every level for small businesses,” he said. “No matter what kind of company you work in, you really feel that pinch.”
Suwapat “Sue” Whitted, owner of Thai Table in Centerville and Thai Kitchen in Miami Twp., said the cost of food has increased dramatically over the past year.
“Chicken, normally, before the pandemic, was $40 for 40 pounds,” Whitted said. “Right now it’s $130 (for 40 pounds).”
Cooking oil that used to cost between $17 and $20 for five gallons now costs $50. As a result, the price of menu items at both restaurants has been increased to cover costs.
“We only did this once at the end of last year,” she said, noting that she plans to continue doing so as she ensures her staff have even better control over food waste. .
According to owner Joe Poelking, Poelking Entertainment Group was hit hard in the first year of the pandemic and steadily improved until the business was in 2018 and 2019 as people came back. The group includes Poelking Lanes in Dayton, Poelking Lanes South in Centerville and Poelking Woodman Lanes in Kettering.
But as business has increased, Poelking bowling alleys have had to endure price increases for the products they buy at wholesale prices and the services they contract for.
“Guys going in and taking out the trash,” Poelking said. “We are charged a fuel service fee. Well, that number has tripled in the last six months.
Supply chain issues have affected bowling alleys “at every level”, including the replacement of bowling balls, pins and shoes. Its suppliers have worked to fill shortages of other products by substituting similar items or opting for brands from different companies.
Poelking said replacing the air conditioning at one of the sites took more than a year, with the cost of it increasing by 20% when he had to delay its installation from winter to spring.
“That’s how volatile it is right now,” he said. “Getting these kinds of supplies, getting this kind of maintenance, that we’re having a lot more problems with than we are strictly with running our business.”
Although this has already had a negative effect on the bottom line, the company has been slow to raise its own prices but will eventually have to, Poelking said.
In addition, companies also face huge problems finding enough staff, Geiger said.
“It’s amazing to me, but more than half of small employers in Ohio have job openings they just can’t fill,” he said. “All you have to do is walk down Main Street and look for the ‘Help Wanted’ signs. Many of them will tell you that we can’t even bring someone in for an interview.
It’s not because companies aren’t trying to pay competitive salaries, Geiger said. About 77% of Ohio small business owners have raised their salaries at least once in the past year, and many have done so twice, he said. Additionally, many have added benefits and worked flexible hours in an attempt to entice people to show up for work.
Staffing has been an issue for the past four or five months. Whitted has been looking for employees to work at a new location slated to open in Beavercreek in August or September.
“I’m looking for new employees, but it’s a bit difficult to find one,” she says.
Staffing issues at Poelking’s bowling alleys have been going on for two years at its bowling alleys, he said.
“We have some, but not the numbers we need,” Poelking said. “For some of them, it’s a matter of dollars and cents. They need… more money and that’s where we are and that’s what we can afford at this particular time.
Poelking, whose grandfather opened the first Poelking bowling alley in 1940, said he did not believe the economy would improve in the immediate future, particularly with rising interest rates.
Reger, of Winston Heat Treating, said he felt “a sense of caution” regarding the economy.
“There is still a lot of pent-up demand in the supply chain and in the manufacturing sector which I think, despite the downturns that may occur over the next six to 18 months, to some extent business will continue” , did he declare.
Despite the challenges she faces in her restaurants, Whitted said she believes things can improve over the next six months.
“What I feel (is that after everyone gets the vaccine, I think my activity will increase because people aren’t too scared to (go out) to eat,” he said. she declared.
Geiger said the NFIB’s hope is that elected state and federal leaders stay away and follow a “do no harm” policy of avoiding regulations or taxes that could potentially worsen the problems facing faced by independent businesses and further complicate matters.
“Politicians need to realize right now that small businesses are really in trouble,” he said.
SMALL BUSINESS IN FIGURES
94: Percentage of respondents who say they found few or no qualified candidates for the positions they were trying to fill
19: Percentage of respondents planning to create new jobs in the next three months
50: Percentage of respondents who reported job openings that could not be filled, down one point from May, but historically very high.
39: Percentage of respondents who said supply chain disruptions had a significant impact on their business.
SOURCE: National Federation of Independent Business