Small business owners are feeling the brunt of inflationary pressures. Sprecher Brewery Co. CEO and President Sharad Chadha, The Tiny Tassel Founder Mimi Striplin, and Carla’s Fresh Market Founder and CEO Ariell Ilunga join Yahoo Finance to discuss how this higher-for-longer rate environment is affecting their respective businesses.
According to Chadha, the current economic environment has presented significant challenges, with the supply chain remaining “disrupted” and inflationary pressures inflicting “pain” on business operations. Despite these headwinds, he acknowledges that the company has continued to grow, though the craft beer business has struggled with rising costs for ingredients and escalating wage expenses for employees.
Striplin acknowledges that over the past year, her business has encountered a significant slowdown in sales, both through its physical storefront and online channels. The clothing boutique has faced the challenge of retaining employees, as wage growth inflation has made it difficult to “compete with wages.” Furthermore, the company struggles with a lack of engagement with consumers, as they cannot afford an ad and marketing spend — forcing them to “allocate…funds where we can see ROI immediately”.
With Ilunga’s business being a post-pandemic brand, she tells Yahoo Finance, “all we really know is the landscape of today.” However, this has not cleared them from the inflationary pressures small businesses face, though she notes that right now, she focuses on “customer acquisition,” making sure to keep items consumers want to keep coming to purchase.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance.
This post was written by Angel Smith
Video Transcript
Small business opt optimism is at its lowest level since 2012.According to the National Federation of Independent Business, the optimism decrease in March comes as inflation remains a top concern.It’s part of Yahoo finance’s small business, big opportunities week.We’re speaking with small businesses from across different industries here in the US.And joining us now to discuss is Sprecher Brewing, Ceo Shara Chada, the tiny Tassel founder, Mimi Strip and Carla Fresh Market founder Ariel logo.Welcome to you all.Um The reason I’m excited to talk to you all is because, you know, listen, we, we talked to a lot of smart economists on this show and strategists and we, we crunch a lot of economic data and if you just looked at the data, you would look at an American economy right now.That seems decent.That does seem sturdy, but you all have a unique perspective because you got boots on the ground.Um So actually I maybe I’ll start there, Sharad with you and we can go around the horn.I’m interested.Srod just what does business look like right now?What does demand look like?Now, Srod your business, Josh, thank you so much.And thanks for having me.We are a, a craft brewery.We’re the oldest craft brewery in Wisconsin Trucker Brewery.Since prohibition, we’ve got about 100 and 50 employees now.So we are boots on the ground.Supply chain is still disrupted.Inflation is still giving us a lot of pain, but we are growing.We have uh in the last 3 to 4 years since we took over about triple the size of the company from 50 to 100 and 50 employees.But it’s been very challenging.Inflation especially has hurt us a lot.The cost of packaging, glass, um honey sugar, um all our ingredients is up, more than 50%.Gas is up and that’s hurting us.Uh We have full health insurance and benefits for our employees that’s gone up a lot.Finding people is still not easy.Interest rates have gone up to 8.5% from 3.5.So for a small business, it’s a big struggle.We’re grinding it out though.We’re hustling and we’re trying to do it and grow within that.Unfortunately, you know, the demand is still there.We’re pushing hard.We’ve gone from a few states now to all 50 states.We just exported to Canada and Australia and hope to keep that going.But it’s not been easy.Mimi, I want to bring you in here next.So I think it’s saying, listen, um there are some, some pain points there, but they’re growing.The demand.Is there.Is that what you’re seeing in, in your business?Mimi and Mimi also describe to us what you all do.Yes.Hi Dash.We are a boutique here in Charleston, South Carolina and we’re actually the only black and Asian owned women’s boutique on the peninsula of Charleston, South Carolina.And we design and make jewelry, clothing accessories and really accessible, fun, joyful styles.And we’ve seen a decline in the last year in sales online and at a brick and mortar store.And we’ve also seen the struggle of finding great team members of being able to compete with wages and benefits and pay them well.And we have just really struggle to engage with our customers again without throwing lots of money at a dollars and different marketing techniques that haven’t really shown a great benefit in the past.So we’re trying to work smarter and really, really allocate our funds where we can see a ro I immediately because this is the first year that we have had to really crunch the numbers and really, really worry about cash flow and we don’t want to have to continue laying off team members.We want to continue building this brand and empowering our team and creating a great workspace not to sell great products.But we’re hoping to start seeing a increase in sales in person and online as the summer season kicks off here in Charleston, Ariel.Let’s get you in the conversation too.Mimi’s talking about kind of working smarter there in Charleston.What, what are the demand trends you’re seeing for your business?Hi there.Thanks for having me.Um, Carlos Fish Market is a very new business.We’ve been open for five months.Um So we’ve opened up on the other side of the pandemic on the other side of the supply chain issue.So all we really know is the landscape of today.Um We’re full service coffee, uh produce driven environment.We have a natural wine body sh uh bottle shop, um grab and go items.And uh we, I’m really focused on just customer acquisition right now and providing a warm and inviting um environment and um really responding to the customer’s needs.You know, the day I opened was the day I released the dream and I’m really focused on bringing in items that the customers want to purchase.Sharad back to you.I’m interested in this question of, of inflation, which you kind of called out as a real headwind.How Sharad as a small business are you sort of navigating that challenge, Sharad?What levers are you pulling?Are you able to raise prices?For example.Uh Josh, that’s a great question.The challenge is for a small business.It’s not easy.Although we are the oldest Strat brewery, we make the number one root beer in America for New York Times and like, uh you know, uh blind taste tests by others.It’s still hard.Uh when you go to Costco or Manard push, uh and to our, to our consumers, you know, we’re not Coke and Pepsi.So it’s not so easy for us to raise our prices.So we have to absorb a lot of those costs and we have that squeezes our margin and our cash position as one of your guests said.And that’s a very, very precarious uh difficult situations.We got to do payroll every two weeks.We have to make a line time and uh have the supply chain ready with warehousing and sales.And it’s been a very challenging, you know, pushing a boulder uphill for a small business and it’s not been easy, Mimy, I’m interested too and, and there in Charleston, which I’m jealous, it’s one of my favorite cities in the country.Um You know, we got that big jobs report last week, Mimmi kind of, you know, it’s true.Cooling, not crashing but cooling.I’m just as sure what you all are seeing are, are you guys hiring right now in your business?We’re not able to hire at this point.We’re starting to see a demand and a need for more team members in our retail shop.But the cash flow is just not there to make a data driven decision to bring on more team members.And of course, there’s always that fine line of if you bring on another team member, will that help to create more revenue and have more hands on deck.And right now we’re really facing tough decisions of, do we make our current payroll or buy our supplies and inventory or do we invest in a new team member?And Ariel?I’m also curious how you, how, how you on your business, how do you reach new potential, um, customers right now, Ariel.Are you having to spend more in marketing advertising?How are you going about it?I’m definitely riding the tailwind of being a new business and just having a compelling story.So I had a fair amount of press in the beginning when this store launched.Um And I just was deeply rooted in several communities here in L A which is sort of propelled the business.I ran farmers markets for five years.So def definitely rooted in a foodie community.I’m a, I’m a native L A person.Um And so I’m just riding those tailwinds and, and because it’s early days, they seem to be getting folks in the door.I of course, need to double that um to keep going and that’s why we’re again like focusing on the customer experience, but to echo what Sharad said, II, I feel what he’s saying completely.Um You know, I, I think consumers are so used to paying a certain price for food and now the veil is being lifted on like the true cost of a lot of things from Uber to doordash to food and it’s, you know, we’re in an education process with customers and letting them know that like this chicken is not all chicken isn’t created equal and, you know, there’s been some pushback on that.Um And so there’s a lot of deep, deep education and, and with our customers about, you know, what, what this orange means versus another orange Shara.Mimi Ariel.Thank you all for joining the show today.you know, running a small business.No, no easy thing takes a lot of guts and a lot of grit.Thanks so much for joining us.Thank you.Thank you, Josh.Thanks everyone.