As inflation rises, small businesses feel the financial crunch
One furniture maker in North Carolina says manufacturing materials are much more expensive now than they were a year ago.
As inflation rises, small businesses feel the financial crunch
Some small businesses are feeling the financial crunch as inflation rates surge to record highs. One furniture maker in North Carolina says manufacturing materials are much more expensive now than they were a year ago.
Some small businesses are feeling the financial crunch as inflation rates surge to record highs. One furniture maker in North Carolina says manufacturing materials are much more expensive now than they were a year ago.
INFLATION PROBABLY COSTING MOST AMERICANS AN EXTRA $276 A MONTH
The owner of Carolina Custom Leather in Conover, North Carolina, says every single material that goes into building furniture has gotten more expensive over the past year, by a lot.
Customers browse while shopping for books at the Strand Bookstore, Saturday, Nov. 28, 2020, in New York. The Strand is an independent family owned bookstore founded in 1927. (AP Photo/Mary Altaffer / AP Newsroom)
"Probably looking at a cushion going up about 70%," said owner Todd Stroud.
Depending on the business, supply chain issues, shipping delays and hiring shortages have made the pandemic feel like a roller coaster. And the ride isn’t over yet. Carolina Custom Leather says one of their biggest challenges right now is inflation.
"Hypothetically, if I made $400 or $500 on a sofa. Now, if I make any money on it I might make a $100 on it," Stroud said.
The consumer price index, which is the annual measure of change in prices paid by consumers, rose 7.5% over the past year according to the U.S. Labor Department. That's the fastest increase in four decades.
Small business owners stand outside their local business. (iStock / iStock)
The National Association of Business Owners and Entrepreneurs (NABOE) says this is likely making the cost of business tricky for small businesses around the country.
"That cost goes up, the buying public will only pay so much for their goods and services," said NABOE founder Ron Wills.
"It’s crazy this whole industry is booming right now," said Davey Cartner, the lead trimmer at Carolina Custom Leather.
CLICK HERE TO READ MORE ON FOX BUSINESS
Many furniture makers are still catching up after seeing a huge spike in business as more people stayed home during the pandemic. It used to take about six to eight weeks for a customer to receive an order.
Close up sign of bankrupt business due to the effect of COVID-19 pandemic. (iStock / iStock)
"Now we’re looking at probably an average of 30 weeks," Stroud said.
This is causing more problems because many couches were purchased a while ago at pre-inflation prices, but now have to be built at post-inflation costs. Carolina Custom Leather is honoring those older prices, but Stroud says you should expect to pay a little more the next time you buy furniture.
"You’re probably going to end up spending about 15 percent more," he said.
READ MORE ON FOX BUSINESS BY CLICKING HERE
Although inflation is top of mind at Carolina Custom Leather, hiring more workers is too. They say they’d hire 15 people right now if they could.