Business at Elizabeth Fisher’s Lizzie Bee’s Flower Shoppe in Richardson has skyrocketed amid the wedding boom that followed a wave of postponements during the peaks of the COVID-19 pandemic. On Tuesday, she had three interviews lined up with potential hires to help her 11-year-old business keep up with demand.
None of them showed up.
“We had to hire someone for hiring because it was taking up so much of my time,” Fisher said.
The 8 million small businesses in the U.S. have dealt with two years of pandemic effects on their livelihoods. Before they could come up for air, they’ve been hit with an ongoing trifecta of challenges: hiring and retaining talent, rising inflation and supply chain shortages.
U.S. Rep. Colin Allred, D-Dallas, met with North Texas small-business owners like Fisher during a roundtable at her flower shop Wednesday to talk about how they’re coping with the challenges.
The event was hosted by Goldman Sachs’ 10,000 Small Businesses Voices, which encourages small-business owners to get involved in pushing policy changes that benefit them. Goldman Sachs also released a survey titled “From Bad to Worse” that paints a picture of small businesses struggling more now than at the start of 2022, when the country was in the midst of a post-holiday peak in COVID-19 cases.
The U.S. Small Business Administration gave out nearly $800 billion to small-business owners in 2020 and 2021 through the Paycheck Protection Program. But now that government aid has dried up, and small-business owners are having to figure things out on their own.
“It seems like those who stayed in business took” a PPP loan, Allred said.
Allred said it’s hard to know whether the challenges facing businesses are temporary or permanent. While Congress is in the process of reloading the Restaurant Revitalization Fund, Allred said he doesn’t think the PPP bucket will be replenished. The congressman said his focus is on getting people back to work with the help of initiatives like child care and paid leave, as well as immigration reform to bring in more workers.
Hiring and retaining talent
According to the Goldman Sachs survey of 1,107 small-business owners, about three-quarters said they are hiring full-time or part-time employees. But 90% of those said they are finding it difficult to recruit qualified candidates.
And while 67% of small businesses have increased wages to retain employees, 42% say they have lost employees to larger businesses that can pay more.
Mallory Smith of Wylie-based custom sign company SignSmiths of Texas said she’s had to get creative with lower-cost ways to stay competitive, such as offering to keep employees’ favorite snacks stocked at the office.
Glenn Bradley of Garland digital marketing agency Big Hit Creative Group said that with fewer candidates to pick from, he’s had to hire people with less experience, which means more time and resources devoted to training.
A small-business owner who is especially familiar with what candidates are looking for, Jolene Risch of Dallas recruiting firm Risch Results, said candidates want a say in when and where they work, competitive pay and a company that cares about their development.
Supply chain woes
Eighty percent of small-business owners said supply chain issues have worsened or stayed the same since January, with only 5% expecting the issues to subside in the next six months, according to the Goldman Sachs survey.
Smith of SignSmiths of Texas said she recently had to tell a customer that a product needed to fulfill an order isn’t available. She said she’s also finding it hard to know how much of her increased costs to pass on to the customer.
Muffi Bootwala of Amcare Pro Home Health, which provides full-service home health care for residents in Dallas-Fort Worth and East Texas, said he had to make his business 20% more efficient to cover increases in his cost of doing business.
A number of the flower farms Fisher worked with shut down during the pandemic, meaning she can’t get enough flowers to meet customer demand. Fisher said her costs have gone up about 25%, and some flower varieties just aren’t possible to get.
“Everyone full-time right now is having to work overtime, and they’re exhausted,” Fisher said. “Our work means going up and down stairs and ladders all day. It’s physically exhausting.”
In the corporate event planning world, inflation and the labor shortage are weighing on the different vendors and workers required to put on events. Laurie Sprouse, president and co-founder of Ultimate Ventures, an Addison-based event and destination management company, said she hasn’t seen anything like it in her 30 years in business.
“Everyone talks about the 8% to 10% inflation year over year, but in our industry, it’s way higher than that,” she said.
Sprouse said the events business experienced “quite the roller coaster” during the pandemic, but demand is now at an absolute high.
“We haven’t missed our margins, but our vendors have just had to increase pricing so much because they’re having such labor shortages, primarily,” Sprouse said, referring to vendors not being able to find drivers. She said the costs of transportation shot up 25% to 50% almost overnight.
Annie Spilman, director of the National Federation of Independent Business, described the sweeping impact of inflation in written testimony to a Texas Senate finance committee.
“Inflation is affecting the cost of everything, from raw materials to transportation,” Spilman said. “Small businesses have little choice but to raise prices for consumers, but 84% of small-business owners nationwide say earnings are down because of the higher cost of doing business.”
In a recent NFIB survey, 93% of business owners said inflation is having a moderate to substantial impact on their businesses.
“We just didn’t get the return of the labor force to the level that we were pre-pandemic,” Sprouse said. “The [events] industry is still very much struggling to do the same or more amount of work with fewer people, and that just drives up costs.”