Opinion — Small business survival at the heart of inflation concerns
Published 2:42 pm Friday, July 29, 2022
Last week, I wrote about the reality of inflation being higher than the government statistics report for those items that people most frequently purchase. This is challenging every family, particularly those of modest income. Raises from their jobs or Social Security checks cannot rise to the level needed for a household to keep themselves above water.
The other big losers are small businesses. Larger businesses can cope because they have the buying power to get better prices. This leaves the small businesses who are left to compete for what is left of the supply line. They are, therefore, forced to pay more for the remaining inventory on the market if there is any. This will make it more difficult to continue their business. This has been the trend for the last generation or so. However, the limited supply of goods has amplified the problem.
If I were a conspiracy theory believer, I would suspect that the mega-retailers of the world would be delighted to have fewer options for consumers. As more small businesses close, that translates into more sales and higher profits for those that survive.
If that was not bad enough, consider the actions in Richmond last year and Washington as some push for the use of electric vehicles. Each of us can decide, for now at least, what we want to drive and how it is powered. Eventually, however, many will become tired of paying taxes to the state and federal government to subsidize the purchase price of other people’s vehicles. At the same time, all the manufacturers are using resources on producing electric cars and trucks.
This creates the next headache of small retail businesses. Throughout our communities, there are stores that sell us gas and assorted pick up items. With plans to install vehicle charging stations all over the country, the government will be making decisions that will break many of these retailers. We do not know what decision making process will be used. How many charging stations will be selected in a community? Will they install them in new locations rather than picking winners and losers? Will they join forces with the bigger corporate stations? Will they use a lottery to pick winners and losers? Will they trust the free enterprise system to work, allowing the fastest to take action to get this business?
Whatever method used, there will be far more losers than there will be winners. The losers will most likely be the most marginal stores. The cost of bringing in new power lines and the charging equipment will be too much of an investment for many stores. They might be able to hang on to provide fuel for a dwindling number of gas powered vehicles, however, as those vehicles wear out and are replaced with electric vehicles, most will have no future.
Small Business Opportunities
On a brighter point, in August, the Longwood Small Business Center that serves from Petersburg to Martinsville, will be holding workshops for those interested in starting a new business. Consider the two options below.
What if you could spend all your time doing what you love? Or finally stop talking about that idea you’ve had and start moving toward actually doing it? The CO.STARTERS Get Started Workshop is here to help. Whether just getting started, stuck on a particular issue, or in need of a refresher, this workshop will provide the jumpstart needed to get you moving.
• Evaluate your entrepreneurial abilities and assumptions
• Explore your idea through the CO.STARTERS Canvas
• Refine your model through customer engagement
• Refining and Taking Next Steps
During this workshop, you’ll have the opportunity to understand what’s driving you, to explore your idea through the CO.STARTERS Canvas, and refine your model by learning ways to get meaningful customer feedback and start pursuing your idea. This workshop is 9 a.m. to noon, Monday, Aug. 11 from 9 a.m. via Zoom.
Some of the most popular reasons to start a business include-having a unique business idea, designing a career that has the flexibility to grow with you, working toward financial independence, and investing in yourself.
Prepare to start a successful business:
• Evaluate your entrepreneurial abilities
• Marketing strategies
• Financial resources
• Legal form of organization
• Tips to prepare & present your business plan
• Cybersecurity Tips
This workshop is 10-11:30 a.m., Monday, Aug. 25 via Zoom. Visit their website for details at: www.sbdc-longwood.com.
Frank Ruff Jr. represents Lunenburg in the state Senate. His email address is Sen.Ruff@verizon.net.