Despite cooling inflation levels and lower costs for business owners, rent prices still remain high and some are even rising. With these increasing rent prices, owners have to make some difficult decisions that have an impact on their customers.
In order to offset increased rent prices, many business owners are turning to price increases on their goods and services. However, the lasting effects of inflation from the past four years has caused consumers to be hesitant to pay increased prices, especially for services they are used to being priced at a certain rate.
In an article from Yahoo! Finance, a Canadian auto repair shop owner, Peter Yu, discussed the challenges the rising rent prices are causing for his business. After his rent price was raised, Yu decided raising his prices would be cheaper than moving locations. Customers who came to his shop for services would tell him outright that the prices were too expensive and ultimately leave his shop. He ended up having to revert back to his original pricing to get customers back.
“When we do try to raise our prices, consumers don’t have the money to pay for it. They’re looking for financing options,” Yu said in the article.
Yu is now looking into alternatives to increase his income by improving his marketing, closing more sales and looking for more financing options to offer his customers.
Other owners are finding additional ways around raising the costs of their goods and services, including choosing to move their businesses to new locations where rent is lower, buying supplies in bulk for cost savings, and some are even pushing back against their landlords raising prices. Some owners are simply making late rent payments. A recent survey from a business networking platform, Alignable, showed that of 6,000 small-business owners surveyed, 41% could not pay their rent on time and in full.
With increased rent costs, small-business owners may begin to take on more debt burdens in order to make ends meet. If you are facing overwhelming debt, talking to a professional about filing for bankruptcy might be an option to alleviate some of this struggle. The attorneys at Sader Law Firm are available to answer all questions and figure out the best course of action for you and your business. Contact us at (816) 561-1818 for a free phone consultation and learn more about what actions might be the best decision for you.