Small businesses across the U.S. are facing rising inflation, supply chain issues and slowing economic growth, compounding their challenges in recovering from the COVID-19 pandemic. In the first of a series of CBS MoneyWatch articles exploring the key issues facing small business owners, Jessica Johnson-Cope, Managing Director of Bronx, New York-based Johnson Security Bureau, discusses how the company such challenges. This interview has been edited for length and clarity.
How has inflation affected your business?
Jessica Johnson-Cope: With inflation, we get less for more. We have an armored car business, so fuel costs are more expensive. Our largest contract for armored cars is with the federal government, and we forecast those prices for five years at a time, so we didn’t expect such a significant increase this year. This is an areabut we don’t make more money.
Another area where we are seeing inflation is our uniforms. Our uniform suppliers source materials from overseas, so shipping costs are more expensive, plus it takes longer.
We do not have opportunities to incorporate these increased costs into our prices unless we start new work because many of our contracts are long term. In addition, customers say they have to pay more for this and that,so many, so you can only go so far.
Are recession worries making future planning difficult?
It is already difficult enough to make financial forecasts. In theit’s even harder to project what’s going to happen from my perspective.
Last week we secured a construction project and the client told us we would have to drop the coverage because one reason they needed insurance was to monitor the equipment. But due to delays in the supply chain, they didn’t even have the equipment they needed.
We got lucky and got a call from a healthcare client who needed additional coverage, so we sent them our people. Net-net, washed out, but that’s not what I expected.
I have to be optimistic because if I’m not, then my team won’t be, and people just won’t show up — and I need people to show up.
The security services business looks like it would be relatively resilient in a recession.
Yes and no. Depending on who the customer is, they respond differently. Companies that provide venues, restaurants, entertainment are taking a hit. But if we do more infrastructure and health care related work, we’re fine. In some cases, people who provide school security are seeing increased demand in response to what happened in Uvalde and the perceived increased threat to people in school settings.
Unfortunately, we are seeing more demand than ever for our services, between concerns for the safety of children and teachers and administrators in school environments, increased concerns about people on public transport and their safety, and generally for people who are outside.
There is also the uncertainty of what will happen in the mid-term elections and possible civil unrest. And with the spike in crime in major metro areas like New York City, we’re getting more calls than we’ve gotten in the last three years. Our business prospects are very good, especially if we do not discriminate about the types of contracts we undertake.
Was it difficult to find workers? And how do you compete with the bigger companies?
We’re certainly competing in bigger terms for talent, and it’s a challenge. Some people will quit their job for more money and some want to be appreciated where they are. It’s a matter of listening to the people on your team and responding to what they say.
For the people who show up, we reward them appropriately, whether it’s an extra day off, a gift card to Dunkin’ Donuts, or giving them the shifts they want. There are other incentives we can use that aren’t always a salary or compensation that people really value.
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