Top Points:
Economic Struggles for Small Businesses: Nearly half (48.6%) of small businesses surveyed believe they won’t survive the current economic conditions in America, with inflation and increased supplier prices being major factors.
Impact of Inflation and Labor Market: Small businesses like Houston Fast Track are facing soaring operational costs, difficulty in finding quality employees, and a significant drop in revenue. Owners are grappling with tough decisions such as cutting back services to stay afloat.
Regulatory Challenges and Future Uncertainty: New regulations in states like California, including reclassifying independent contractors and raising the minimum wage for fast-food workers, are adding to the burden on small businesses. Experts fear these policies favor big corporations and could drive small businesses out of the market.
Full Report:
Almost 50 percent of small businesses surveyed say they won’t survive under the current economic conditions in America, highlighting the dire situation many entrepreneurs face.
A recent survey of 80,000 small businesses, conducted by RedBalloon and Public Square, revealed that 48.6 percent believe they are unlikely to endure the ongoing economic challenges. Of those surveyed, 22.4 percent stated their business would “definitely not” survive continued inflation, while 26.2 percent felt their business “probably” would not make it.
The survey, conducted from April 30 to May 10, encompassed small businesses with fewer than 500 employees nationwide, including retailers, restaurants, service providers, and those in the hospitality industry.
Andrew Crapuchettes, founder and CEO of RedBalloon, attributed the current struggles to the mandated COVID-19 lockdowns in 2020. “When you’re not Amazon, the results were devastating,” Crapuchettes said. “Now with rampant inflation, higher taxes, and a tight labor market, it’s no wonder that so many businesses are struggling to survive.”
A staggering 80 percent of small-business owners reported supplier price increases over the past 30 days, marking the eighth consecutive month of such hikes. Additionally, four in 10 small-business owners have delayed bill payments this year to manage cash flow. Over 60 percent now believe the U.S. economy is heading into stagflation, where prices rise while economic growth stalls or recedes. “It’s been a difficult road for America’s small businesses,” Crapuchettes added. “Small businesses are the lifeblood of our economy.”
Houston Fast Track, a family entertainment business in Texas, is one of many grappling with these challenges. Owners Vera Balic and Chris Jordan have seen their rent skyrocket from $900 a month 32 years ago to $9,045 today. Finding quality employees is another significant concern. “We pay very well for our industry, but larger businesses can pay much more, leaving us short-staffed,” Ms. Balic told The Epoch Times.
Despite steady business, Houston Fast Track reported a 13 percent drop in revenue from the previous year, which Ms. Balic attributes to the economy. “It’s frustrating when you’re just barely making it,” she said. The family business, with 30 full and part-time employees, faces uncertainty due to the continued rate of inflation. “Right now, it’s all about being able to find employees to cover shifts. We may have to cut back on parties if we don’t have enough staff,” Ms. Balic explained.
Nationally, several major retailers and restaurants have been forced to close locations due to rising costs and unsteady revenue. These include Red Lobster, Cracker Barrel, TGI Fridays, Applebee’s, Outback Steakhouse, and Denny’s, as well as retailers like Best Buy, Macy’s, CVS, Dollar Tree, and 7-Eleven.
Allan Garfinkle, president of Crestmont Capital in California, which funds small businesses, blames excessive regulation and the favoring of big business for the struggles faced by small businesses. “The trucking business has been hit very hard,” Garfinkle told The Epoch Times. He pointed to new California laws reclassifying independent contractors as employees and mandating a $20 per hour minimum wage for fast-food workers as examples of policies that could further harm small businesses. “They want everyone working for a big corporation—and this could kill independent contractors,” Garfinkle warned.
Fearing for the future of small businesses, Garfinkle plans to relocate his business to Dallas by the end of the year. “It’s very dangerous right now, and I believe it’s taking us on a path where this country is not meant to go,” he said.
Original Story by Mary Prenon, The Epoch Times
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