Grant Cardone, the well-known entrepreneur and motivational speaker, recently sparked a conversation with a bold Twitter statement: "Small businesses are getting KILLED by INFLATION. Tell me I'm wrong."
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Along with this tweet, Cardone shared a screenshot showing that about half of U.S. small businesses have just one to four employees. His message resonated with many, as inflation weighs heavily on small businesses nationwide.
The tweet set off mixed reactions. While some agreed with Cardone, saying things like “Absolutely,” others took a different view. One person joked, "You know what would help? Price controls!" Another person also blamed "corporate greed" rather than inflation.
Some users even criticized Cardone himself, saying, "They're getting killed because people like you don't invest in them."
Cardone's tweet addresses a real issue many small businesses are struggling with today. Even though inflation has slowed from its peak in 2022, the impact on small businesses hasn't disappeared.
Businesses are struggling more than ever to make ends meet due to growing labor and material prices.
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For example, restaurant owner Kevin Meehan, who runs the Michelin-starred Kali in Los Angeles, shared with CNN how he's been "rolling with the punches" harder than ever. During the 2023 holiday season, sales were lower than expected, and the growing "Dry January" trend, which encourages people to abstain from alcohol, hurt alcohol sales, making it difficult for him to cover payroll and pay bills. Despite his restaurant’s elite status, Meehan said he still feels far from secure due to rising food, liquor, and labor costs.
Inflation’s Impact on Small Businesses
It’s clear that inflation isn't just a headline – it's affecting real businesses in every industry. Manufacturers, for instance, are paying 26% more for materials since 2021.
Construction businesses face a 30% hike in material costs, with rising steel, concrete, and even nail prices. Food-related businesses aren't spared, either, with fertilizer up 34% and packaging costs increasing by 38%.
Also, wages have increased by 16%, while interest rates have skyrocketed, making borrowing more expensive. So, even if inflation is technically slowing down, the damage it has caused over the past few years is still being felt, especially by small businesses that don't have the same cushion as larger corporations.
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Cardone’s point about small businesses with one to four employees is important. These smaller companies don't have the same backup resources as bigger ones. So, when inflation drives up costs for supplies, wages, and bills, they often have to raise prices or find other ways to save money, like making their products smaller.
"Small businesses actually make up the vast majority of business establishments in the United States economy, so they are at the forefront of what's happening in economic activity," a senior economist at Wells Fargo told CNN.
"I don't have a choice but to be optimistic. I just need to fight harder," said the restaurant owner we previously mentioned. "All the money we make, I'm just going to put it right back into the cookie jar."
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