Talk to local business owners about what keeps them awake and you will hear a slew of topics: labour shortages, rising costs of pretty much everything, and interest rates — which directly affect the COVID-19 relief government loans.
The last two years have been a roller-coaster for small business owners; high inflation rates are putting us in a position of paying more to operate, and therefore having to pass on the increases to our customers, who are also feeling the pinch.
Statistics Canada reported that Canadians paid 9.7-per-cent more for food in April 2022 compared to the same month last year. Basic items such as fresh fruit have jumped in price by 10 per cent; meats are in the same price-jump range. This directly affects those in the food and beverage industry, an industry historically known for already-slim margins.
In my case, I am constantly pushing back with my distributors, trying to compromise on more manageable payment terms, negotiating the elimination of added fees such as delivery gas surcharges and other things that bring my prices up and margins down — all in an effort to find solutions so customers don’t end up with the burden of paying more for the same. In many cases, we end up with even smaller margins because we choose not to pass along all increases to our customers.
In speaking with other entrepreneurs, I’ve found that some are introducing new lines of services and products that are not as pricey but are still good in quality — finding better “entry-level” offers that would see customers coming in and revenue flowing.
The pandemic forced us to pivot into new ways of offering our products and services, while inflation is dictating what products and services are worth keeping.
Labour shortages continue to impact our businesses. Staff are feeling the impact too: with gas prices increasing, candidates are looking to find jobs closer to home. This affects those businesses in rural areas, such as farms, bed and breakfasts, golf courses — the pool of employees has decreased significantly, thus forcing them to offer higher wages and extra incentives to lure workers back in. Boom: take off more margin points.
Those of us who relied on COVID-19 loan programs to keep our businesses operating during months of mandated closures are now feeling the burden of higher interest rates on those loans, literally overnight. Yes, let’s squeeze that margin even more.
It is rough out there — for everyone. I know we all have a threshold of how much we can afford, whether as consumers or business owners, but I wholeheartedly hope people continue to support our local small businesses throughout yet another tough time.
Karla Briones is a local immigrant entrepreneur and owner of Global Pet Foods Kanata & Hintonburg; Westboro Fresh; founder of the Immigrants Developing Entrepreneurs Academy; and an independent business consultant. The opinions here are her own. Her column appears every two weeks.