Small businesses still adapting to the pandemic and labor shortages face yet another economic hurdle. Inflation is the top concern for 44% of small-business owners, according to a 2022 MetLife and U.S. Chamber of Commerce Small Business Index. It could also be a contributing factor to their decreasing morale. The Small Business Optimism Index, measured by the National Federation of Independent Business, dipped below its 48-year average for the sixth consecutive month as of June 2022.
But there’s a sliver of hope, according to some entrepreneurs. When prices rise across the board, small businesses have a secret weapon that many big-box stores don’t: There’s a relatable person behind the brand.
“Overall, I think this is a place where indie brands can win — where we can be personal and open with our community,” says Leslie Valdivia, co-founder and CEO of Vive Cosmetics, an online culture-conscious beauty brand.
Here’s how customers can help small businesses stay afloat as the cost of doing business rises.
1. Leave positive reviews
If you have a great experience at a local restaurant or shop, pay it forward by letting others know. This is especially crucial for newer small businesses that don’t have an established reputation yet.
“Reviews are free,” says Jennifer Glanville, director of partnerships and collaborations at the Boston Beer Company. “Spread the word.”
2. Interact online
“Liking or commenting on a post increases that brand’s credibility,” says Glanville, who also oversees Brewing the American Dream, a program that provides coaching to small businesses in the food and beverage industry. “It can increase their following.”
And now that many businesses have tighter margins due to the impacts of inflation, they have less money to spend on advertising, adds Beverly Malbranche, founder and CEO of Caribbrew, a social impact-driven coffee company.
“Sharing is supporting,” she says, explaining that it can be as simple as posting an Instagram Story.
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Woman in coffee shop paying for a cup of coffee and cake with her mobile phone.
3. Prepay or subscribe when you can
When a business has less cash on hand, it can be a challenge to pay bills, stock shelves and pay employees. Paying ahead of time, when you can, improves businesses’ cash flow. And it’s why companies like Caribbrew offer prepaid subscriptions for customers who know they’ll use the product repeatedly. Subscription-based models, prepaid or not, also give business owners a better idea of how much income they’ll make in the future, so that they can plan ahead.
4. Pre-book appointments and keep them
Being a loyal customer helps small businesses immensely. Letting the business owner know you’ll be back ahead of time is even better.
Tara Ritchie, owner of Waggin Tails Pet Resort in Whitesburg, Kentucky, says pre-booking appointments is one of the best things you can do to help service-based businesses. When her clients do this, she can staff the salon appropriately and better predict cash flow. If you have to cancel, she adds, try to do it ahead of time so the business has time to fill the appointment. No-shows, on the other hand, leave businesses in a lurch.
5. Be patient when businesses are short-staffed
Fanni Xie, owner of Uni Uni Bubble Tea in Appleton, Wisconsin, says lines can be long when her bubble tea cafe is short-staffed. Instead of immediately leaving a bad review because of a lengthy wait time or a problem with an order, she suggests talking to the staff first.
“I hope the customer will be more understanding about our situation,” Xie says.
6. Buy local year-round
Shopping small applies beyond Small Business Saturday and holiday gift giving. Making a habit of buying local and spending your money within your community — no matter how small the purchase — is a good starting point for consumers.
“The reality now with inflation is that everything is increasing,” Glanville says. “So if you could put your dollars to work for a small business, that really makes a difference for them.”
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6 ways to support small businesses hit with inflation
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Photo Credit: Gergely Zsolnai / Shutterstock
The dominant economic story of recent months has been a historic run of inflation in the U.S. economy. Nearly every segment of the economy is experiencing rapid price increases at rates not seen in decades. Rising prices are putting greater pressure on households’ and businesses’ financial states as they pay more for goods and services.
The COVID-19 pandemic set off a number of factors that have contributed to the current inflationary environment. Ongoing issues in the supply chain related to the virus have made it more difficult to manufacture, store, and ship goods. At the same time, demand in the economy has been high, particularly for the types of durable goods most affected by supply chain issues. A tight labor market has pushed businesses to raise wages for workers in many industries. The federal government pursued aggressive stimulus to support the economy during the pandemic, including several massive relief packages from Congress and low interest rates from the Federal Reserve. Together, these factors have created imbalances between supply and demand, and with more money in the economy, prices have increased.
One measure the Bureau of Labor Statistics uses to track inflation is the Producer Price Index, which measures average selling prices received by domestic producers of goods and services for their output. The rate of year-over-year price increases in the PPI rose every month from December 2020 to March 2022, reaching a peak of 11.2%. Even after removing foods, energy, and trade services—categories which tend to show greater volatility in prices—year-over-year increases in the PPI still register at 7%.
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Photo Credit: Gergely Zsolnai / Shutterstock
The dominant economic story of recent months has been a historic run of inflation in the U.S. economy. Nearly every segment of the economy is experiencing rapid price increases at rates not seen in decades. Rising prices are putting greater pressure on households’ and businesses’ financial states as they pay more for goods and services.
The COVID-19 pandemic set off a number of factors that have contributed to the current inflationary environment. Ongoing issues in the supply chain related to the virus have made it more difficult to manufacture, store, and ship goods. At the same time, demand in the economy has been high, particularly for the types of durable goods most affected by supply chain issues. A tight labor market has pushed businesses to raise wages for workers in many industries. The federal government pursued aggressive stimulus to support the economy during the pandemic, including several massive relief packages from Congress and low interest rates from the Federal Reserve. Together, these factors have created imbalances between supply and demand, and with more money in the economy, prices have increased.
One measure the Bureau of Labor Statistics uses to track inflation is the Producer Price Index, which measures average selling prices received by domestic producers of goods and services for their output. The rate of year-over-year price increases in the PPI rose every month from December 2020 to March 2022, reaching a peak of 11.2%. Even after removing foods, energy, and trade services—categories which tend to show greater volatility in prices—year-over-year increases in the PPI still register at 7%.
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6 ways to support small businesses hit with inflation
While inflation is now apparent throughout the economy, not every sector has been affected equally. Services have had the lowest rate of inflation at 8.7%, which in part reflects how services businesses have remained susceptible to disruptions from the spread of COVID among employees and customers. In contrast, energy (36.7%) and transportation and warehousing (21%) have seen year-over-year price increases well above the 11.2% total across all categories. And inflation in these categories may be contributing to inflation in others: other businesses that rely on energy and logistics are facing higher costs, which they then pass on to customers.
While inflation is now apparent throughout the economy, not every sector has been affected equally. Services have had the lowest rate of inflation at 8.7%, which in part reflects how services businesses have remained susceptible to disruptions from the spread of COVID among employees and customers. In contrast, energy (36.7%) and transportation and warehousing (21%) have seen year-over-year price increases well above the 11.2% total across all categories. And inflation in these categories may be contributing to inflation in others: other businesses that rely on energy and logistics are facing higher costs, which they then pass on to customers.
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6 ways to support small businesses hit with inflation
The categories of energy and transportation and warehousing include many of the industries with the highest inflation. The list of industries with the greatest price increases is filled with business types closely linked to energy and logistics, topped by oil and gas extraction with a 64.8% increase in prices over the last year.
The data used in this analysis is from the Bureau of Labor Statistics Producer Price Index. To determine the industries most affected by inflation, researchers at Self Financial calculated the one-year change in prices from March 2021 to March 2022. In the event of a tie, the industry with the greater one-month change in prices from February 2022 to March 2022 was ranked higher. Only three-digit NAICS industry sectors were included in the analysis.
Here are the industries most affected by inflation.
The categories of energy and transportation and warehousing include many of the industries with the highest inflation. The list of industries with the greatest price increases is filled with business types closely linked to energy and logistics, topped by oil and gas extraction with a 64.8% increase in prices over the last year.
The data used in this analysis is from the Bureau of Labor Statistics Producer Price Index. To determine the industries most affected by inflation, researchers at Self Financial calculated the one-year change in prices from March 2021 to March 2022. In the event of a tie, the industry with the greater one-month change in prices from February 2022 to March 2022 was ranked higher. Only three-digit NAICS industry sectors were included in the analysis.
Here are the industries most affected by inflation.
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6 ways to support small businesses hit with inflation
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Photo Credit: flywish / Shutterstock
- One-year change in prices: +20.8%
- One-month change in prices: +0.9%
- Two-year change in prices: +27.0%
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Photo Credit: flywish / Shutterstock
- One-year change in prices: +20.8%
- One-month change in prices: +0.9%
- Two-year change in prices: +27.0%
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6 ways to support small businesses hit with inflation
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Photo Credit: Kamil Macniak / Shutterstock
- One-year change in prices: +21.0%
- One-month change in prices: +7.8%
- Two-year change in prices: +15.9%
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Photo Credit: Kamil Macniak / Shutterstock
- One-year change in prices: +21.0%
- One-month change in prices: +7.8%
- Two-year change in prices: +15.9%
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6 ways to support small businesses hit with inflation
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Photo Credit: Kzenon / Shutterstock
- One-year change in prices: +21.1%
- One-month change in prices: -0.1%
- Two-year change in prices: +26.0%
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Photo Credit: Kzenon / Shutterstock
- One-year change in prices: +21.1%
- One-month change in prices: -0.1%
- Two-year change in prices: +26.0%
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6 ways to support small businesses hit with inflation
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Photo Credit: pamir / Shutterstock
- One-year change in prices: +21.1%
- One-month change in prices: +1.0%
- Two-year change in prices: +26.4%
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Photo Credit: pamir / Shutterstock
- One-year change in prices: +21.1%
- One-month change in prices: +1.0%
- Two-year change in prices: +26.4%
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6 ways to support small businesses hit with inflation
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Photo Credit: Mark Agnor / Shutterstock
- One-year change in prices: +21.2%
- One-month change in prices: +4.9%
- Two-year change in prices: +26.9%
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Photo Credit: Mark Agnor / Shutterstock
- One-year change in prices: +21.2%
- One-month change in prices: +4.9%
- Two-year change in prices: +26.9%
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6 ways to support small businesses hit with inflation
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Photo Credit: Natali Glado / Shutterstock
- One-year change in prices: +22.0%
- One-month change in prices: +3.1%
- Two-year change in prices: +55.4%
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Photo Credit: Natali Glado / Shutterstock
- One-year change in prices: +22.0%
- One-month change in prices: +3.1%
- Two-year change in prices: +55.4%
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6 ways to support small businesses hit with inflation
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Photo Credit: ersin ergin / Shutterstock
- One-year change in prices: +23.0%
- One-month change in prices: +9.2%
- Two-year change in prices: +10.5%
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Photo Credit: ersin ergin / Shutterstock
- One-year change in prices: +23.0%
- One-month change in prices: +9.2%
- Two-year change in prices: +10.5%
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6 ways to support small businesses hit with inflation
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Photo Credit: MIND AND I / Shutterstock
- One-year change in prices: +24.7%
- One-month change in prices: +3.4%
- Two-year change in prices: +66.0%
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Photo Credit: MIND AND I / Shutterstock
- One-year change in prices: +24.7%
- One-month change in prices: +3.4%
- Two-year change in prices: +66.0%
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6 ways to support small businesses hit with inflation
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Photo Credit: Vitpho / Shutterstock
- One-year change in prices: +24.8%
- One-month change in prices: +6.7%
- Two-year change in prices: +34.8%
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Photo Credit: Vitpho / Shutterstock
- One-year change in prices: +24.8%
- One-month change in prices: +6.7%
- Two-year change in prices: +34.8%
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6 ways to support small businesses hit with inflation
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Photo Credit: Matushchak Anton / Shutterstock
- One-year change in prices: +25.6%
- One-month change in prices: +0.6%
- Two-year change in prices: +36.6%
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Photo Credit: Matushchak Anton / Shutterstock
- One-year change in prices: +25.6%
- One-month change in prices: +0.6%
- Two-year change in prices: +36.6%
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6 ways to support small businesses hit with inflation
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Photo Credit: MAD_Production / Shutterstock
- One-year change in prices: +25.8%
- One-month change in prices: +2.1%
- Two-year change in prices: +41.7%
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Photo Credit: MAD_Production / Shutterstock
- One-year change in prices: +25.8%
- One-month change in prices: +2.1%
- Two-year change in prices: +41.7%
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6 ways to support small businesses hit with inflation
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Photo Credit: ThePowerPlant / Shutterstock
- One-year change in prices: +33.5%
- One-month change in prices: +15.9%
- Two-year change in prices: +22.5%
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Photo Credit: ThePowerPlant / Shutterstock
- One-year change in prices: +33.5%
- One-month change in prices: +15.9%
- Two-year change in prices: +22.5%
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6 ways to support small businesses hit with inflation
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Photo Credit: Byjeng / Shutterstock
- One-year change in prices: +35.5%
- One-month change in prices: -1.7%
- Two-year change in prices: +69.0%
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Photo Credit: Byjeng / Shutterstock
- One-year change in prices: +35.5%
- One-month change in prices: -1.7%
- Two-year change in prices: +69.0%
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6 ways to support small businesses hit with inflation
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Photo Credit: Golubovy / Shutterstock
- One-year change in prices: +58.1%
- One-month change in prices: +15.8%
- Two-year change in prices: +135.4%
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Photo Credit: Golubovy / Shutterstock
- One-year change in prices: +58.1%
- One-month change in prices: +15.8%
- Two-year change in prices: +135.4%
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6 ways to support small businesses hit with inflation
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Photo Credit: Jim Parkin / Shutterstock
- One-year change in prices: +64.8%
- One-month change in prices: -10.4%
- Two-year change in prices: +233.3%
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Photo Credit: Jim Parkin / Shutterstock
- One-year change in prices: +64.8%
- One-month change in prices: -10.4%
- Two-year change in prices: +233.3%
