An article in the Washington Post I wanted to cover – the headline “Delayed raises and renovations: Small businesses face new uncertainties”
Let’s quote.
Two and a half years into the pandemic, small-business owners say they’re just beginning to recover from the sudden blow that hobbled many of them during the early 2020 pandemic restrictions. Since then, owners have dealt with surging costs, labor shortages and large swings in consumer demand often influenced by area cases of the coronavirus.
Now they’re being barraged by diverging economic messages that have many wondering what to do next. The U.S. economy shrank for a second quarter in a row, reviving fears that the country might be entering a recession. But an exceptionally strong jobs report this month wiped out many of those concerns while also making it harder and costlier for small-business owners, particularly in the hospitality industry, to find and keep workers.
At the same time, consumer demand for goods has slowed, and borrowing costs are going up, as the Federal Reserve raises interest rates in the hope of slowing the economy enough to curb decades-high inflation.
AND
In interviews, more than a dozen small-business owners outlined the steps they’re taking to guard against a possible economic downturn. Some say they’re putting off routine renovations or bringing on contract workers instead of hiring full-time employees. Others are stocking more lower-priced goods or canceling arrangements with retailers like Target and QVC to sell directly to consumers in a way that will give them more control over production and profits. All of these pullbacks, when multiplied over thousands of small businesses, can work to further cool down the economy.
Many business owners say it’s been difficult to predict when things might slow down, or by how much. Others are also still trying to make up for shortages of both workers and supplies and say they’re hesitant to cut back just yet, even if that means eating into profits.
Why do we care?
Earlier in the week I commented on trying to temper my tone. I’m highlighting this piece not because I believe in whole scale panic, and instead because I’m trying to listen more to actual customers to gauge the market. And that’s what you should be doing too. Lean into your customers and serve their needs. Note the final statement – they are hesitant to cut back. Don’t assume you’re cutting prices or going for the cheapest solutions. These owners want to build stable businesses, and that’s the key insight. Lean into that.