KINGSPORT, Tenn. (WJHL) – Hiked prices at the gas pump is nothing new, but it isn’t the only price rising, and small businesses in Kingsport are feeling the pinch of inflation in their day-to-day operations.
From guns and ammunition to chocolate, local small businesses have had to make adjustments to the way they run things in order to keep their heads above water.
The Bureau of Labor Statistics reported last week that costs went up 7.9% in the last 12 months, the largest inflation increase since the 1980s.
“The all items index rose 7.9 percent for the 12 months ending February. The 12-month increase has been
steadily rising and is now the largest since the period ending January 1982,” the report read.
Raising prices is okay
For Austin White at Gunslingers in downtown Kingsport, that meant increasing prices since the beginning of the COVID-19 pandemic.
He said communicating with the customer base was key to staying in business.
“We tried to tell them as best as possible because you know the same ammo that they were buying for like say $8 to $10 for a box is now going for maybe over $20 depending on what kind it is so you know, some ammo and stuff have over doubled in price,” he said.
White explained that since the beginning of the pandemic, many gun and ammunition manufacturers have told distributors and sellers like Gunslingers that prices would go up, and they did.
“Mostly it just boils down to raw material, metal, lead copper, certain things of that nature, reloading components, they went sky high and ammo did the same. Getting ammo is not difficult now it’s just the process is still in a very elevated state compared to what it was a few years ago,” he said.
And so, prices went up.
“As opposed to somebody buying a gun and maybe buying a few boxes of ammo now they’re coming in and buying a gun and maybe buying one box of ammo and even hesitating on that just due to the rising cost of ammo,” White said.
According to small business expert Aundrea Salyer, Gunslingers did the right thing.
“This is also the time to consider raising their prices, a lot of businesses don’t like to do that. They’re scared they’re going to lose customers that they raise their prices,” said Salyer, who is executive director of the Kingsport Office of Small Business Development and Entrepreneurship.
She spoke from her experience working in the glass industry, explaining that in that industry, many companies billed a fuel and energy surcharge.
“So small businesses can implement something like that, but they are going to need to communicate with their customers what they’re doing and why they’re doing it,” she said. “And it has to make sense: there should be a formula, there should be a rationale for them to do that, but they should not be afraid to raise their prices.”
Marketing makes or breaks a business
Salyer explained that small businesses must adapt to the online world in order to be successful during this time of increased costs.
“Having the technology, that tech skills are important right now, no matter what kind of business you have, because you’re going to need to do business online to some extent. So that skill, if you’re thinking about starting a business, you should definitely shore that up you know, learn what you can about social media and actually how to get a business online, online marketing strategies, and such,” she said.
Taking a business online could be one option, but thinking outside the box is another necessity, Salyer explained.
“You can sell more stuff by taking your business online. If you’re not able to sell online, deliver your products that curbside pickup, and all that you’re losing money, you’re leaving money on the table,” Salyer said.
For non-profit Bellafina Chocolates in downtown Kingsport, this is one way they are combatting inflation.
“We are definitely seeing big increases in costs like shipping, utilities, packaging, and ingredients,” said Brenda Barnicki, founder and president of Bellafina Chocolates. “So the situation we have is since we are nonprofit 100% of our profits, go to orphanages and other charities and we try to provide employment for women in recovery. We cannot fail and we cannot shrink. So we are addressing inflationary pressures kind of head-on.”
Her way of facing it head-on is by targetting a larger audience.
“What we’re doing is trying to pursue more and larger business across the US. So what that does for us is that allows us to spread our fixed costs, but it also allows us to pursue volume discounts in purchases and things like packaging and ingredients,” Barnicki said.
She added that she still needs the community’s help to spread the word that her non-profit aimed at helping children in need and women in recovery, needs help.
“The community can definitely help us and the biggest thing is to help us spread the word about our mission and our products, particularly people that you know, outside of this area because we can’t afford nationwide advertising and once people learn about what we’re trying to do, they’re hooked and they buy but getting the word out is our biggest challenge,” she said.
The bottom line
Salyer explained that small businesses should always be aware of their bottom line.
“The business owners need to pay attention to their expenses. They really need to do that overhaul looking at the business and really examining areas using the crisis as an opportunity to examine the areas within their business to save money,” Salyer said.
Areas to examine would be reducing costs by selling more stuff, reducing recurring monthly costs, or letting employees go.
“Those are things that business owners have to look at because again, you’re talking about that bottom line, there are only two things you can do increase your revenue or reduce your costs,” Salyer said.
One thing Bellafina Chocolates refused to do was let employees go.
“We have chosen not to decrease the number of recovery positions that we’re offering,” Barnicki said.
She explained that her nonprofit only has one to three paid positions for women in recovery and that the roles are transitional roles, so these women can find permanent positions elsewhere.
“We feel like we have an obligation to the women that depend on us to help them get on their feet. And the good news is that along with the inflationary pressures, there’s also a kind of record shortage of employment and there are jobs for people who want them and people who are going after him. And so our role is to try to help the women get to where they have a good reliable work record where they can have a good experience that they can talk about in a job interview. So that they can get a good-paying job,” Barnicki said.
One thing that Salyer said was always a good idea was to keep tax breaks in mind, as well as grant opportunities and other incentives to grow or start a business.
Businesses can reach out to Salyer’s department HERE for more information on how to build or grow a small business.