Dallas small businesses, feeling the pinch of rising costs, struggle to stay open

A hair salon had to raise its prices. A dry cleaner cannot get the plastic bags he uses for cleaned and ironed clothes. A restaurant serves fewer fries with each order.

With inflation at a 40-year high, it’s increasingly difficult for small businesses to stay open and continue to provide jobs that support thousands of Dallas-area families.

These businesses are being pinched in myriad ways — more expensive supplies, higher utility bills, higher wages and, in many cases, fewer customers, which have stayed away since the COVID-19 pandemic.

About 97% of all businesses in Dallas County are small businesses, with about 50,000 in Dallas alone, according to the 2020 census.

Add rent to skyrocketing costs plaguing US small businesses

Many have stayed open through pandemic relief programs like the Paycheck Protection Program or Economic Disaster Loans. The Small Business Administration handed out $34 billion to Dallas-Fort Worth businesses in 2020 and 2021.

But the galloping rate of inflation from one year to the next, which reached 9.1% in Junethreatens the viability of small businesses.

Three businesses, nested in a strip mall at the intersection of Abrams Road and Northwest Highway in northeast Dallas, shared with Al Dia how they are coping with the economic crisis.

“Going through a tough time”

“It’s all piled up since the pandemic and we’re struggling to keep the business afloat,” said María García, owner of beauty salon Lizy. “Things were just starting to calm down when gasoline prices rose and (prices of) everything else soared.”

García, 62, who opened her beauty salon 22 years ago, said she would receive frequent applications before the pandemic hit. But now finding workers is more difficult.

“The girls were still coming to ask for a job, but (we) were full. Now I can’t find anyone who wants to work. I’ve had ‘wanted employees’ sign up for months and they come for interviews, but they don’t come back,” García said.

With three unoccupied slots in his living room, income is dwindling. People still need a haircut but don’t want to wait any longer on Friday and Saturday, the two busiest days, and leave when they see a long waiting list.

To make matters worse, styling products are also more expensive.

So García had no choice but to raise prices. A general haircut went from $16 to $18. A color touch-up treatment costs $70 now, whereas just a few weeks ago it was $65.

When many workers stopped going to their offices or attending official events during the pandemic, they also stopped sending their clothes to the dry cleaners.

“Everything people send to dry cleaners has to do with events and those have been canceled,” said Syed F. Mehndi, 62, owner of Sterling Cleaners. “We reopened and everything was fine, then prices went up and it became difficult to find reasonably priced products.”

Mehndi, known to customers as Frank, said a box of wire coat hangers he could buy for $42 last year cost him $65 today.

Chef and owner Fernando Barrera chats with a customer about a food order at this Latin Deli restaurant, Saturday, July 16, 2022, in Dallas. The restaurant is one of many Hispanic businesses that have been hit by inflation.(Ben Torres / Special Contributor)

“We’re just surviving”

Next to the cleaners is Latin Deli, a sandwich, smoothie and dessert restaurant that chef-owner Fernando Barrera opened in 2011.

Restaurants are among the businesses hardest hit by inflation. According to the June report from the Department of Labor Statistics, the food cost index has risen 1.8% since May, with sharp increases in the prices of butter, sugar, flour, cereals, bakery and dairy products.

On top of that, it has become harder to hire workers for businesses that traditionally rely on tips, and many people have stopped eating out.

“A restaurant is the worst business to own right now; we are just surviving. There are no profits. It’s like everything was conspired to make us go bankrupt,” Barrera said.

Barrera said he resisted the temptation to raise prices because customers always noticed. Instead, he found ways to save money.

“We put fewer fries with the sandwiches (and) the containers we use for dressing are smaller now and things like that; we have to get creative,” Barrera said.

Jobs, departures and unemployment: the Texas labor market in four graphs

Inflation forced Barrera to downsize. He owned three locations of his restaurant: one in Addison, another in Plano, and the original in northeast Dallas. He closed one and sold another.

It bets on its original location to resist inflation. Three months ago, he raised the salaries of his employees by 20%. Even with that, it struggles to retain workers.

This restaurant has a few outdoor tables. The menu items are written in big white letters on the bay windows: cupcakes, pancakes, omelettes and fresh lemonade. A sign just below reads: “We are hiring”.

About James Almanza

Check Also

Chili’s Offers Restaurant Careers to Military Veterans Through a Smooth Transition Program

Find out what clicks on FoxBusiness.com Popular Chili’s restaurant brand offers veterans a convenient way …