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Rising rent and inflation continue to weigh on small businesses across the country

Rising rent and inflation continue to weigh on small businesses across the country.png
Posted at 7:13 AM, Jul 21, 2022
and last updated 2022-07-21 10:13:45-04

“I've been in business for 41 years,” Peggy Anderson, the owner of Annie’s Cafe, said.

This once lively cafe is now closed. The empty walls and ladders signify a change. The building the restaurant was renting was sold earlier this summer.

“It was time for us to either close completely or perhaps try to find a new location. We did do a little bit of work trying to find something for the last few months but nothing seemed to click quite right for us,” she said. “Then, it was just the cost of having to move to purchase everything, to get everything up and going. It was quite a bit of money.”

So, Anderson made a tough decision.

“We made the choice to just appreciate what we have and be in the moment and close Annie’s,” she said. “I had so many customers that were just, they were crying, because we’ve been here so long…and we’ve taken care of their families.”

She said purchasing the building was too expensive for her business and after looking around, everywhere else was too expensive, too.

A recent survey from small business referral network Alignable found 33% of all U.S. small businesses could not pay their May rent in full and on time.

“I think everybody puts rent as the number one priority. If they don't have a place to do business they don't have business,” Pat Dunahay, the owner of PDA Road Gear, said.

Dunahay has owned his car audio and accessory shop since the 1980s. He’s also a part of his local business chamber.

“There’s so many underlying things that are causing rent to be a real problem for so many businesses today,” he said. “The models always try to make a profit. It's really hard to do now.”

National Small Business Association president Todd McCracken said high inflation and other factors are also causing these businesses to struggle.

“We’re seeing it more in some places than others,” McCracken said.

Yet, small businesses play an important role in the economy, accounting for nearly 44% of national economic activity, according to the Small Business Administration in 2019.

“Small businesses create most new jobs in the economy. They create most of the innovation in the economy,” he said.

With rent, inflation, and everything else, running a business can be difficult right now.

“There's a piece of me that feels like we really dodged something by closing,” Anderson said. She is simply grateful for the way she was able to say goodbye, giving her customers a few weeks to come in one last time.

“It is bittersweet. It's hard to let it go, but sweet we were able to control our ending,” she said.