Conducted by RedBalloon and Public Square, the survey also indicated that 22.4 percent of respondents said their business would “definitely not” survive continued inflation, while 26.2 percent indicated their business “probably” would not make it.
The survey, running from April 30 to May 10, included 80,000 small businesses with fewer than 500 employees from across the country. Retailers, restaurants, service providers, and those in the hospitality industry were among those interviewed.
Responding to questions about what changes business owners would need to make to stay afloat, many said they would just have to close their doors because they cannot reduce costs any further. Others stated that they would be forced to cut costs to the bare minimum, while the remainder said they may be faced with closing up to half of their locations.
Andrew Crapuchettes, founder and CEO of RedBallon, a national job board, told The Epoch Times that the problem began with the mandated COVID-19 lockdowns in 2020.
“When you’re not Amazon, the results were devastating,” he said. “Now with rampant inflation, higher taxes and a tight labor market, it’s no wonder that so many businesses are struggling to survive.”
One of the most staggering statistics is that 80 percent of small-business owners report their supplier prices have increased just over the past 30 days, marking the eighth straight month of supplier price hikes.
Other key findings of the survey show that four in 10 small-business owners report having to delay bill payments this year in order to manage cash flow. More than six in 10 now believe the U.S. economy is headed into stagflation—wherein prices continue to rise while the economy fails to grow or even slips into recession. “It’s been a difficult road for America’s small businesses,” Mr. Crapuchettes added. “Small businesses are the lifeblood of our economy.”
Vera Balic and her husband Chris Jordan have owned the Houston Fast Track in Texas since 1992. The family entertainment business offers go-carts, an arcade, golf course, laser tag, and children’s parties. One of their biggest concerns is finding quality employees.
The couple worries constantly about keeping the small business afloat, while competing for workers with large firms like Amazon or other warehouses. “We pay very well for our industry, but some of these larger businesses can pay so much more, and we are always finding ourselves short-staffed,” Ms. Balic told The Epoch Times. “A lot of our employees already have second jobs, and with rents and the cost of living increasing, they are struggling as well.”
The couple’s rent on the 10,000-square-foot, two-acre business has increased from just $900 a month some 32 years ago, to $9,045 a month today. In addition, they are dealing with the added expenses of maintaining their games and equipment.
“Every time I need to order something, I have to figure out how much extra we’ll have to charge the customers to cover our costs, but not price them out,” said Ms. Balic. “We have to be able to fix some of the older arcade games because buying new ones are often at double the price now.”
While business is steady, Ms. Balic reported a 13 percent drop in revenue from this time last year. “It’s definitely economy-related, and it’s frustrating when you’re just barely making it,” she said.
The continued rate of inflation spells uncertainty for Houston Fast Track. “With so many years in this business, we’re aware of industry trends, so we know how to ‘nickel and dime’ to make it,” said Ms. Balic. “Right now, it’s all about being able to find the employees to cover shifts. We may have to cut back on parties now, if we don’t have anyone available to work.” Their current staff includes a total of 30 full and part-time employees.
Since the beginning of 2024, published reports have listed some of the nation’s top retailers who have been forced to shutter several of their locations, due to rising costs and unsteady revenue. These include Red Lobster, Cracker Barrel, TGI Fridays, Applebee’s, Outback Steakhouse, and Denny’s restaurants. Major retailers, such as Best Buy, Macy’s, Rue 21, CVS, Dollar Tree, 7-Eleven, Sam Ash Music, and others, have also closed the doors at many of their branches this year.
While some blame “corporate greed” as the reason behind runaway inflation, Ms. Balic contends this is definitely not the case when it comes to small business. “With the rising costs of rent, shipping, utilities, and taxes, businesses have to raise prices to cover these costs and make ends meet,” she explained.
Allan Garfinkle, president of Crestmont Capital in Orange County, California, along with a staff of 25, help to fund small businesses throughout the country. The firm specializes in companies with annual revenues under $30 million, with the average business earning $2–5 million with less than 10 employees. “The trucking business has been hit very hard,” he told The Epoch Times. “It’s been very difficult for them to survive in this economy.”
Mr. Garfinkle blames too many regulatory components, a push toward favoring big business, and the skyrocketing cost of fuel. “I worry about the way that small-business owners are being treated,” he said. As an example, he discussed a recent California law that now requires companies hiring independent contractors to reclassify them as employees. While some argue that it now creates a level playing field and provides a minimum wage, benefits and additional perks, others argue that it results in a loss of flexibility for reclassified workers and that those reclassifying costs could raise prices for consumers.
“This California law could be a preview for what’s to come for the rest of the nation,” added Mr. Garfinkle. “They want everyone working for a big corporation—and this could kill independent contractors.”
He also questions a new California law that became effective this April, requiring that all fast-food employees be paid at least $20 an hour. “This will result in making even affordable food more expensive, so many people will just stop going out to eat.”
Mr. Garfinkle fears there may be no place for small businesses in the future—if the political climate remains the same. “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.
Mr. Garfinkle said his business will probably survive, because he’s considering moving it to Dallas by the end of the year.
