Small business owners are grappling with the formidable challenge of sticky inflation, according to Chase for Business CEO Ben Walter, who shared his perspective during the company’s Make Your Move Summit in Texas. He emphasised that small businesses are particularly disadvantaged when it comes to buying power compared to larger competitors.
Kyle Noonan, co-founder of FreeRange Concepts, the parent company behind various “eatertainment” ventures, described elevated commodity costs as a significant challenge that is squeezing profit margins. In industries like his, where profit margins are traditionally slim, these rising costs are exacerbating financial pressure.
Debra Moore, the founder of Mama Moore’s Gourmet Popcorn, echoed these concerns, emphasising the alarming impact of high inflation. She noted that she is now paying 200% more for some essential ingredients. These skyrocketing costs have compelled business owners to adapt their plans to survive, with strategies like expanding vendor bases to secure better supply pricing.
The issue extends beyond the restaurant and food industry, affecting various sectors. According to Chase’s Midyear Business Leaders Outlook, nearly 80% of small business owners have experienced expense increases of 6% or more. In response to these rising costs, entrepreneurs are resorting to strategies such as raising product prices and cutting expenses to mitigate the impact of inflation.
In addition to inflation, small businesses face a range of other concerns, including hiring challenges, the spectre of a recession, and access to credit. According to Ben Walter, business owners are eager to borrow and expand but are confronted with the challenge of finding the necessary workforce to make these plans a reality. These multifaceted challenges underscore the complexity of the current economic landscape for small businesses.