Bay Area small businesses struggle with inflation as optimism slides

Partytime Machines President/CEO Aimbrell Shanks on Friday, May 10, 2024, outside her company in Santa Clara, Calif. It is definitely not party time at Aimbrell Shanks’ Santa Clara rental company, PartyTime Machines. As at a great many Bay Area small businesses, inflation is not only driving expenses up, it is shrinking her market as consumers cut spending to cope with their own rising household costs.

A new report from Bank of America shows that in the Bay Area, small business owners’ confidence in the economy has fallen from last year, with inflation the top concern. Polling firm Ipsos surveyed 1,288 small business owners across the U.S. for the bank between March 4-28. Raul Anaya, president of business banking at Bank of America, believes some of the drop in confidence since last year among Bay Area small business owners results from issues affecting the technology industry, such as a slowdown in venture capital funding, the fall of Silicon Valley Bank, and layoffs by tech companies.

“We had this whole structure that was very sound,” Raisz said. “Everything’s tied together. That was disrupted. That’s left a lot of small businesses wondering whether it even makes sense to keep going.” Attarwala was upbeat even though inflation has taken a bite of the business. Raw materials have risen in price. Some perfume bottles are 50% more expensive. Shipping costs have jumped significantly. Buying more supplies in bulk has helped shave expenses by 5% to 10%, and his new processing machines have boosted production without adding labor costs, but the company had to raise prices a bit last year, he said.

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