From the cover
The state of small business
What’s happening?
Over the year percent change in CPI, Houston, The Woodlands, Sugar Land Year-over-year percent change in CPI,
The consumer price index measures the change in prices for goods and services.
-2% 0% 2% 4% 6% 8% 10% 12%
Patrick Jankowski, chief economist with the Greater Houston Partnership, said he’s noticed a national trend of restaurant and retail small businesses closing in the last six to 12 months. He said he believes the phenomenon is due to higher interest rates and a slowing economy. “Small businesses are facing that difficulty right now: the general slowing of the economy,” Jankowski said. Twenty-four percent of surveyed business owners nationwide cited “labor quality” as their biggest business problem as of November, per a Dec. 12 news release from the National Federation of Independent Business Texas. Twenty-two percent of owners cited inflation as the biggest challenge. “We’ve got the rising cost of doing business, and we have a decreased profitability standpoint for what they can margin out at the end of a month, of a day, [etc.],” Reid said. “And [small businesses] are doing more activity with less people, less time and less money.”
+8.5%
+7.6%
+4.5%
+4%
+6.1%
The consumer price index peaks at 10.2% in June 2022.
+3%
Oct. 2020 -0.1%
April 2021
Oct. 2021
April 2022
Oct. 2022
April 2023
Oct. 2023
53% 22% 25% 53%
According to the U.S. Chamber of Commerce’s Small Business Index for the fourth quarter of 2023, which is compiled from 750 unique interviews with small businesses: National business outlook
cited revenue as a top concern
said the U.S. economy is in good health
agreed there is a worker shortage in their local area
cited inflation as one of the biggest challenges they’re facing
SOURCES: U.S. BUREAU OF LABOR STATISTICS, U.S. CHAMBER OF COMMERCE/COMMUNITY IMPACT
In their own words
“Some businesses [that] were able to thrive during the boom times of the last two, three years are going to have to make adjustments, and those that can make the adjustments will survive. Those that can’t will go by the wayside.” PATRICK JANKOWSKI, CHIEF ECONOMIST, GREATER HOUSTON PARTNERSHIP
“Some food costs stabilized, but for the most part, food costs went through the roof, and employees and labor costs more than doubled. So it became less profitable and very difficult to manage the variables.” JEFF ANGELO, OWNER, HODGE PODGE LODGE
“So much goes on in [the food business] and around it. From customer service to food to quality to staff to inventory, inflation. … So I feel like the restaurant industry or the food business in general is one of the hardest to keep afloat.” VICTOR RUIZ, OWNER, COWBOY TACOS AND BURGERS
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