Small business faces big challenges: Inflation, recession and 18-hour days – ilmhunt

Small business faces big challenges: Inflation, recession and 18-hour days – ilmhunt

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In good times, restaurant owners operate on thin margins. Now, rising costs are making it harder for independent restaurants to survive. Jenna Petersiel, owner of Chilmark Tavern on the island of Martha’s Vineyard in Massachusetts, spoke with CBS MoneyWatch about how she keeps her business afloat. This interview has been edited for length and clarity.

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Jenna Petersiel, owner of Chilmark Tavern, fixes a joint on a piece of kitchen equipment.

Jenna Petersiel

How is this bout of painfully high inflation affecting your business?

Jenna Petersiel: As far as inflation goes, the cost of things to me at Martha’s Vineyard is always high. So when it’s going up like it is now, it’s very difficult for us to adjust the price to reflect the right profit margin.

I always feel like, “Oh God, I’m charging too much money? Is it worth what I’m charging now?” For me, the biggest challenge around the anticipated customer perception. How much can we charge for a meal without people thinking they are being ripped off?

Since it is difficult for you to increase the price of your menu, can you still be profitable given how much the cost increases?

We never charge enough here. Chilmark is a dry town so we are BYOB, and most restaurants make all their profits off alcohol and profit if they break even on the food. We have to make money out of food to cover all costs. I find myself stuck at this point where it’s like, “How high can we go until it’s just not ok anymore?”

Economic growth has slowed significantly this year, and there is a risk of recession. How does that affect you?

I live in a constant state of fear. It’s always, “What’s the worry this week?”

As far as recession fears go, I think my customer base is recession proof. But I found that customers who used to come two to three times a week rarely eat here. I don’t know if it’s based on diet, because of age or COVID, or fear of recession. I didn’t ask them, but I wanted to.

COVID-19 is still there. Is there a case among your staff?

I am fully staffed and it is anticipated that I will be overstaffed, which is a miracle in this market. Then a little over a month ago the sous-chef and line cook were in a terrible car accident and one of them actually died.

Right after the accident, we were closed for five days. We reopened for one night, then I tested positive for COVID and all the kitchen staff tested positive for COVID the next day. We are all sick and we are closed for another week. It is the first COVID illness we have experienced in the restaurant since the COVID incident.

We had to close even though we bought food – had spoiled food – but nothing could be done. We save what we can and have to throw away a bunch of stuff, which feels awful. We lost two weeks before the Fourth of July which is usually a tremendous week for us.

We also usually have a 24-hour cancellation policy but people say, “I can’t come in because I just tested positive for COVID.” I don’t know if they do or not, but I can’t say they’re lying.

Many restaurants say they have shortages, but that shouldn’t be a problem for you. What is your secret?

Now, what’s important to me is making sure our kitchen staff are well paid and valued. Sometimes they actually take precedence over making sure the restaurant is profitable, because it’s hard to see people working 16 hours a day in the heat of 110 degrees in the kitchen and not making enough money. I don’t want to be that kind of boss – to push people over the edge.

I think it happened through word of mouth that I’m good to work for and am a kind employer. I’m always looking for a dishwasher. I think it will last for the rest of the time in the restaurant. One will always find a dishwasher – it’s not a fun job.

So what is your biggest challenge right now?

Cost of goods and stay on top of it. Also utility costs, especially here on Martha’s Vineyard, have gone up. Electricians, plumbers, refrigerator repairs cost more than usual.

Even though my costs are going up, I don’t raise the menu prices that much because that’s not right. Would you be comfortable paying $36 for a hamburger? That’s kind of what it’s worth for everything that goes into it.

Are you a small business owner struggling with inflation and a slowing economy? If so, CBS MoneyWatch wants to hear about your biggest challenges, and how you’re adapting your business. Please email moneywatch@cbsinteractive.com.

Small business faces big challenges: Inflation, recession and 18-hour days – ilmhunt

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