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Sharply higher costs are yet another challenge thrown at business owners by the global pandemic. The unpredictability of shipping, labor and the coronavirus itself have created an environment where owners are often left guessing about when products might arrive and how much they’ll cost. The Labor Department said Thursday that prices at the wholesale level rose a record 9.7 percent in December from a year ago.

“There’s a tremendous amount of not just risk – risk you can calculate – but uncertainty. We just don’t know what’s going to happen.” said Ray Keating, chief economist with the Small Business & Entrepreneurship Council. “Consumer demand is there, but there are just enormous supply chain constraints. All of this is feeding into price increases.”

In response, owners are raising prices, cutting staff hours, dropping some goods and services and nixing free shipping in a delicate balancing act. But with low visibility into how long the higher inflation will last, some owners are increasingly worried about keeping their doors open in the long run.

“We put out new fires every single day and have had to reassess the way we do business to cater to new behaviors,” said Deena Jalal, owner of plant-based ice cream chain FoMu and co-founder of wholesaler Sweet Tree Creamery in Boston.

For her FoMu shops, the cost of business overall rose about 15 percent in 2021 compared with 2020. She has raised prices about 10 percent but taken other measures, too: shifting to more delivery and cutting flavors like avocado ice cream, which became too expensive to make as avocado prices rose.

“No business can sustain the rapid increase in expenses that we have seen in the last year,” Jalal said. “You used to be able to work really hard and see progress. Now you work really hard just to try to stay afloat.”

Jalal is apprehensive about the long-term prospects for the small business community if inflation doesn’t calm down soon. “If we have to work this puzzle for another two years, I really do think we’ll see a lot of businesses — ourselves included — struggle to keep their doors open.”

Elizabeth Benedict, owner of interior design firm Elizabeth Home Decor & Design in Chestnut Hill, said prices have risen 7 percent to 30 percent for all the products she buys. She pays shipping surcharges on top of that.

“Most of these (increases) come with less than a two-week notice,” she said. “We cannot guarantee any quotes that go out and have had to adjust our contract as well as all of our language on our proposals to reflect these variable conditions.”

To deal with rising costs and overseas shipping delays, Benedict significantly changed her vendor list, and now shops only with U.S. brands that make products in the U.S. And she added services like e-commerce and virtual design. But she’s still facing longer timelines for her projects and is not taking on new clients until things stabilize.

“We continue to pivot with the punches, but definitely feel like we are being pushed and pulled in too many directions,” she said.

Rising Costs Add to Pandemic Pain for Small Businesses

by The Associated Press time to read: 2 min
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