Small business owners haven’t known stability since early 2020.
They’ve been taken on a three-year-long roller coaster, encountering a global pandemic followed by once-in-a-lifetime supply chain issues, inflation and a labor shortage.
“The last two to three years have been hard to predict,” said Odin Clack, owner of Odin Leather Goods in Lewisville and The Colony, Texas. “It’s been a wild ride.”
But even so, the U.S. Small Business Administration’s Dallas-Fort Worth district office is fielding more calls than ever before about starting new businesses, said district director Herbert Austin.
“Every call used to be about (COVID-19 relief options),” he said. “Now it seems like every call is from another person who wants to start a business and be on their own. It’s constant.”
Before the pandemic, the country had about 31 million small businesses. Now it’s up to about 33 million, Austin said, and he expects the trend to continue in 2023.
“You would think when things were going so terribly, there wouldn’t be an increase,” Austin said. “But no one wants to work for anyone anymore. It’s amazing to me — the American spirit of doing something on your own.”
Odin opened his two storefronts in the last three years. While the stores might have grown at a faster pace pre-pandemic, both are doing well overall, he said. In fact, about 65% of small business owners expect revenue to increase to a seven-year high by next October, according to a Bank of America survey of 1,300 small business owners across the country.
But inflation has weighed on sales, Odin said. He notices a dip whenever inflation is at the top of the news cycle.
“Everyone is worried about money and inflation, and my business is certainly for disposable income,” he said.
His handcrafted wallets, for example, range in price from $35 to $135, and handbags or totes cost anywhere from $145 to $450.
On the back end, Odin said his cost of producing goods has gone “up and up and up.” Higher fuel costs and cattle prices have raised the price of leather. Hardware he paid $800 for two years ago now costs about $2,000, he said.
“I don’t like raising prices on customers every month or so like the vendors, so I try to save it for one big one per year,” he said.
He’s prepping for a potential recession by refocusing on his online shop, which hasn’t been growing at the same pace as it was before he concentrated on his brick-and-mortar stores. About three-quarters of entrepreneurs said they’re equipped to survive a recession, the Bank of America survey showed.
Odin also plans to get more people into his stores through in-store activities, partnerships and trunk shows.
“I need customers to talk about the store,” he said. “Them talking about us is always better than us talking about us.”
Even with higher interest rates making it more costly to get loans, the SBA office is seeing a rise in calls from existing small business owners who want additional funding to grow their businesses, Austin said. More than half of small business owners plan to expand their business in the next year, and 83% plan to obtain funding to help with that, according to the Bank of America survey.
Taylor Symomé, owner of Touch-N-Skin spa in downtown Dallas, said she’s looking at funding options as she thinks about a potential recession. Like Odin, she said holiday shopping has been slower than usual.
“I’m a little nervous about how things are going to go next year,” she said. “When the cost of everything goes up from gas to rent, spa services become a want, not a necessity for people. They don’t prioritize taking care of their body.”
She’s also establishing partnerships with companies and schools to offer chair massages on self-care days.
“I was able to get through COVID, and now this is just the next challenge,” she said.
