When inflation runs rampant, consumers often will focus on the rising prices that affect them. They flip over the plastic yellow tag attached to their favorite product and grimace and grumble about the increase. Yet, buyers rarely look behind the register and ask, “What do local business owners go through during inflation?”
This article is a study of the mutual effort of consumers and producers to stay afloat when inflation threatens to drag them down.
According to the Bureau of Labor Statistics, the acceleration in inflation started in March 2021 and lasted until September 2021. In a business.org article, Trevor Wheelwright reported that
“92% of small business owners reported supplies or services to run their business has increased.”
With the cost of supplies, utilities, wages, and rent increasing, businesses owners have no choice but to raise their own prices to sustain themselves. According to Wheelwright, 82% had to increase their prices due to the effects of inflation.
And this chain reaction has reached also into junior Kaci Wagner’s household. Her family owns Wagner’s Import Service Center, a local business that specializes in automotive repair and service. Located in San Luis Obispo, Ted Wagner opened the shop in 2003 and is now facing the drastic rise in prices.
An article entitled “What is the Small Business Fail Rate” by fundera.com states the hardest part of creating a business isn’t in the first few years, but approaching the decade mark where 70% of small business owners fail. In addition, 20% of small businesses fail in their first year, 30% in their second, and 50% after five.
Despite these odds, Wagner’s business has been open for 19 years.
“I wanted to be my own boss and control the amount of hours I worked and when,” Wagner said. “With a lot of hard work [we] have survived.”
Reflecting the 20% increase in costs for supplies and services reported by 71% of small-business owners (business.org), Wagner stated how inflation has raised the cost of all of his supplies.
“There is nothing for this small business which hasn’t risen in pricing,” Wagner said, listing that the price of parts has risen at least 20%-40 and oil prices have gone up almost 35-50%. “We’ve have had to raise our labor rate higher this year than the normal. But to all other aspects of the business, the costs are rising: rent, utilities, insurances etc.”
The ramifications of inflation don’t stay at the family business, at the shop in SLO. There is a subtle presence that follows Wagner around her house and to school each day.
“I have seen the effects of inflation in my life. My family is changing strategies to try and lower spending to be able to save in other ways,” Wagner said.
“My parents like to keep the talk of finances to a minimum during family time to not take up that time… but my father has been working more hours than he normally would.”
For now, local businesses like Wagner’s Import Service Center are remaining open in this time of increased prices, but are in the same boat as consumers; hoping and waiting for a fall in the inflation rate… for the good of their survival.
