Small businesses in Dallas, feeling the pinch of rising costs, struggle to remain open

A hair salon had to raise prices. A dry cleaner can’t get the plastic bags it uses for cleaned and ironed clothes. A restaurant serves fewer french fries in each order.

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

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

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

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Many stayed open thanks to pandemic assistance programs like the Paycheck Protection Program or Economic Injury Disaster Loans. The Small Business Administration distributed $34 billion to Dallas-Fort Worth businesses in 2020 and 2021.

But the galloping year-over-year inflation rate, which hit 9.1% in June, threatens small businesses’ viability.

Three businesses, nested together at a shopping center at the intersection of Abrams Road and Northwest Highway in northeast Dallas, shared with Al Día how they’re coping with the economic crunch.

‘Having a difficult time’

“Everything has been piling up since the pandemic and we’re having a difficult time keeping the business afloat,” said María García, owner of Lizy Beauty Salon. “Things were barely starting to settle down when gas prices went up and (the prices of) everything else skyrocketed.”

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

“Girls would always come asking for a job but (we) were fully staffed. Now I can’t find anyone who wants to work. I’ve had the ‘Employees wanted’ sign up for months and they come in for interviews, but they don’t come back,” García said.

With three slots unoccupied in her salon, revenue is shrinking. People still need a haircut but don’t want to wait longer on Friday and Saturday, the two busiest days, and leave when they see a long waiting list.

To make things worse, hair styling products are more expensive, too.

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

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

“Everything people send to the dry cleaners has to do with events and those were canceled,” said Syed F. Mehndi, 62, owner of Sterling Cleaners. “We opened back up and everything was going well, then prices went up and it has become difficult to find products at reasonable prices.”

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

Chef and owner Fernando Barrera speak with a client about a food order at this restaurant...
Chef and owner Fernando Barrera speaks with a client about a food order at this restaurant Latin Deli, on Saturday, July 16, 2022, in Dallas. The restaurant is one of many Hispanic-owned businesses that have been affected 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 most inflation-affected businesses. According to the June report from the Department of Labor Statistics, the food cost index rose 1.8% since May, with sharp increases in the prices of butter, sugar, flour, cereals, baked goods and dairy products.

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

“A restaurant is the worst business to own right now; we’re just surviving. There are no profits. It feels like it was all planned so that we’ll go out of business,” said Barrera.

Barrera said he resisted the temptation to raise prices because customers always notice. Instead, he figured out ways to save money.

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

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

He’s betting on his original location to weather inflation. Three months ago, he raised his employees’ salaries by 20%. Even with that, he’s struggling to retain workers.

This restaurant has a few outdoor tables. Menu items are written in big white letters on the floor-to-ceiling glass windows: cupcakes, crepes, omelets and fresh lemonade. A sign right below reads: “We’re hiring.”

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