‘I’m not sure we will survive’: Local small businesses battle inflation

Raising prices is necessary, expert says

BEXAR COUNTY, Texas – At a tiny gelato shop in Helotes, the “OPEN” sign is dimmed. So is business.

“The truth is, we may not survive,” said Isaac Butler, co-owner of Congelato.

He opened the quaint little shop six years ago. It survived the COVID-19 pandemic. Inflation is killing it.

“The cost of production and stocking gelato rose up by about 25% to 30%,” he said. “That’s coinciding with the time, with our sales down 25% to 50%.”

Cash is in short supply, so he can only afford to open his doors on weekends for now.

“Being mom and pop, we’re totally self-funded, no banks involved. And so it’s really difficult for us to generate financial resources when in times of need,” Butler said.

His struggles are familiar to entrepreneurs whose dreams have been turned upside down, first by the pandemic, then the COVID economy. Supply chain snags, difficulties hiring qualified and willing workers, and rising costs of rents, insurance, labor and their products have brought one whammy after another.

Many survive. Many don’t.

Grome’s Sewing Machine Company is a survivor.

“It’s been really tough because the manufacturers, some of them, have even raised their prices, like three times in a year. And so what’s hard though, is that while they raise the cost, they’re not raising the suggested retail price,” said Cyndi Grome, whose family founded the company in 1950.

Their machines, notions and quilting fabric costs are significantly higher than before the pandemic. Grome said a single yard of fabric costs them about $3 more.

They’ve raised prices where they could. But inflation is far from the only challenge.

“We did a ‘We’re hiring’ ad, and people would come in, they fill out the application, and then they would never show up for the interview,” Grome said. “That happened a lot.”

While solutions can be as unique as the businesses themselves, Richard Sifuentes, with the UTSA Small Business Development Center, offered advice for what small businesses should be doing right now.

“You need to start building a banking relationship, even if you don’t use funding right away, for the future,” he said.

Sifuentes said access to capital is a big hurdle, as is access to technology and the internet.

Next, he says, business owners must keep detailed records and recognize when it’s time to raise their prices.

“It’s not easy for a small business owner who is passionate about serving their community to increase their prices, but it’s a necessity in order to survive,” Sifuentes said.

It’s also crucial to be open to change and adapt. Sifuentes said many businesses can turn their challenge into a new opportunity.

He also suggests small business owners ask themselves, “What value are you bringing to your customer? What is really important to the customer now? Has their need changed? Has their want changed? Am I serving that customer? If not, I need to look at pivoting, changing, either coming up with a new product or service or tweaking it.”

At her sewing and quilting business, Grome has done that. They not only sell fabrics and machines, they peddle intangibles like expertise and trust.

They offered classes before, but the pandemic changed things.

“Unless you’re offering something that’s really going to pique their interest, they’re not going to go to class because they will go to YouTube to look at that,” Grome said. “But I can tell you, YouTube is not always correct.”

She knows her customers can buy online or at large corporate retailers, but she encourages them to shop local where they can get personal service and warranties.

As for Butler and his gelato shop, he’s also making tweaks. He’s planning indoor seating and a cover over his porch. A new air conditioning system is also a must, he said, to survive another scorcher of a summer. He’s also applied for a grant as a lifeline.

“We will continue to be flexible and rework and retool, re-envision what we are as a business,” Butler said. “We’re open to dreams.”

To find out how to get help from the San Antonio Small Business Development Center, click here.

Find more consumer content on KSAT.com here

About the Authors

Marilyn Moritz is an award-winning journalist dedicated to digging up information that can make people’s lives a little bit better. As KSAT’S 12 On Your Side Consumer reporter, she focuses on exposing scams and dangerous products and helping people save money.

Sal Salazar is a photojournalist at KSAT 12. Before coming to KSAT in 1998, he worked at the Fox affiliate in San Antonio. Sal started off his career back in 1995 for the ABC Affiliate in Lubbock and has covered many high-profile news events since. In his free time, he enjoys spending time at home, gaming and loves traveling with his wife.

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