Small businesses, the oft-touted economic engine that pays nearly 45% of total U.S. private payroll, is feeling economic pain just as badly as corporate America. This Jan. 11 Associated Press story posted on MSNBC.com took a look at some small business owners who are feeling the recession deeply, like the Minneapolis-based Scandia Bake Shop. There, high flour prices and slow sales had the current owner contemplating closure after the shop’s 60 years in business.
“They come out in droves and you make most of your money between Thanksgiving and Christmas,” owner Gary Arvidson told the AP. “And then this year I was really counting on that and the economy went into the dumper.”
To cope, the AP said, “small business owners — from neighborhood plumbers to graphic design firms — are paying employee salaries before their own, trying to renegotiate leases and pleading for customers on neighborhood blogs. But despite their best efforts, the customers aren’t there.”
Raymond Keating, chief economist at the Virginia advocacy group the Small Business Survival Committee, told the wire service: “People are scared. They’re not quite sure what to do.”
Small businesses account for more than 99% of all employer firms and produce almost a third of the nation’s export value, the story said, quoting federal statistics. So when they hurt, everyone feels the pain, even chain office supply stores who depend on small business owners for business.
Ajay Ekesa told the AP his Kahawa Coffee House in Chicago may not last through the spring. He’s spreading flyers, opening his shop for community meetings and trying to drum up business on the Web.
“Right now I’m trying to do everything I can do,” he told the AP. “With every hour that I’m staying open, I’m not making money. I’m losing money, which doesn’t make much sense.”
As for the Minneapolis bake shop, it looks like the community is going to rally around it. So far, about 1,000 people have signed a petition to keep Scandia open, the AP said.
This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to firstname.lastname@example.org.