Since the beginning of 2020, small business owners have been wondering how stable it is.
They were on a three-year roller coaster ride of a global pandemic followed by once-in-a-lifetime supply chain issues, inflation and labor shortages.
“The last two to three years have been hard to predict,” said Odin Clack, owner of Odin Leather Goods in Lewisville and The Colony. “It’s been a wild ride.”
But even so, the SBA’s Dallas-Fort Worth regional office is getting more calls than ever about starting a new business, said regional director Herbert Austin.
“Every call used to be about [COVID-19 relief options]he said. “It seems like every call these days is from another guy who wants to start a business and be independent. It is constant. “
Before the pandemic, there were about 31 million small businesses in the country. That number now stands at around 33 million, Austin said, a trend he expects to continue in 2023.
“When things are going so badly, you think there won’t be an increase,” Austin said. “But no one wants to work for anyone anymore. It amazes me — the American spirit of getting something done on your own.”
Odin has opened his two storefronts in the past three years. While those stores may have grown at a faster rate before the pandemic, overall both are doing well, he said. In fact, about 65% of small business owners expect their income to increase to a seven-year high by next October, according to a Bank of America survey of 1,300 small business owners nationwide.
But inflation weighed on sales, Odin said. Whenever inflation is at the top of the news cycle, he notes a dip.
“Everyone is worried about currency and inflation, and of course my business is for disposable income,” he said.
For example, his handcrafted wallets range in price from $35 to $135, and his handbags or handbags range from $145 to $450.
On the back end, Odin says his goods are “increasingly expensive” to produce. Higher fuel costs and cattle prices have boosted hide prices. Hardware he bought for $800 two years ago now costs about $2,000, he said.
“I don’t like to raise prices on customers every month or so like suppliers do, so I try to save it for a big one a year,” he said.
He’s preparing for a potential recession by refocusing on his online store, which isn’t growing at the same rate as it was before he focused on brick-and-mortar stores. About three-quarters of entrepreneurs say they can afford to weather a recession, according to the Bank of America survey.
Odin also plans to bring more people into his stores through in-store events, partnerships and trunk displays.
“I need customers to talk about the store,” he said. “They always talk about us better than we talk about us.”
Even as rising interest rates make it more expensive to obtain loans, the SBA office is seeing an increase in calls from existing small business owners looking for more capital to grow their businesses, Austin said. According to a Bank of America survey, more than half of small business owners plan to expand their business in the next year, and 83% plan to get funding to help make it happen.
Taylor Symomé, owner of the Touch-N-Skin spa in downtown Dallas, said she was considering financing options given the potential recession. Like Odin, she said holiday shopping was slower than usual.
“I’m a little nervous about what’s going to happen next year,” she said. “When the cost of everything from gas to rent goes up, spa services become a need, not a necessity. They don’t prioritize taking care of their bodies.”
She also forms partnerships with companies and schools to provide massage chairs on self-care days.
“I was able to get through COVID, now it’s just the next challenge,” she said.