Small businessses feeling the effects of the economy

More than two thirds of businesses in our area have fewer than ten employees. It is those small businesses that rely most on lines of credit to keep their shelves stocked, and employees paid. But with many banks not lending money, some small businesses are left scrambling.

Ever since Claire Efird was a little girl, she dreamed of owning a book store. Now approaching her 10 year anniversary as owner of the Saltshaker Book Store and Cafe, she is proud, but with the state of economy right now, also a little concerned.

“Probably like anyone else who goes to work everyday, some days you love it and some days there are challenges,” Efird said.

With our financial crisis strapping many banks down, small businesses are suffering right along with everyone else. When banks will not lend the money, businesses can not borrow.

Jonathan Rowe is a professor of entrepreneurship at UNCW. He said, “They may not be offering lines of credit to those businesses, and in the past when they they’ve looked to that to support their business, whether it be inventory, adjustments, or some downturns as we are facing now, or seasonality, they no longer have that option.”

Efird, however, is still determined to run her store. “Our expenses are not going down, and like I said, we still need to turn the lights on whether there is a customer in here or not.”

71% of businesses in southeastern North Carolina are considered small because they have less than ten employees each. Rowe said those are the ones that are being affected the most. “Right now, consumers are questioning every single financial decision they are making, and that’s absolutely true if not more true of a business, and so any decision you make to buy inventory, to reduce inventory, to make sales forecasts, change your price, they are all huge decisions in this time.”

For Efird, her book store is her pride and joy, although times at the Salt Shaker may seem a little shaky, she is confident all will work itself out. “I’m not worried, I know we will be here, I trust the lord, because we provide a service here that no one else does, to the depth that we do.”

Another concern for small business owners is the number of employees on staff during a time like this. One of the ways to cut costs might include laying off employees, but that just means more people could be out of jobs.