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Yearly revenue of small businesses nearly doubled, but profits fell

Record inflation drives up costs for small business as the holiday season is in full swing.

PHOENIX — Small business owners nearly doubled their revenues from the summer of last year to this year, but at the same time, their profits fell four percent.

That’s according to a recent report out from Kabbage, the small business lender owned by American Express.

With Small Business Saturday upon us, a time to show support to local businesses here in Arizona, we talked with business owners to find out what challenges they’re up against and the mood among shoppers as they check off their wish lists for loved ones.

While Thanksgiving and Black Friday are behind us and Cyber Monday is ahead, it’s safe to say the holiday shopping rush is on.

“Men, women… we have baby, home, bar, jewelry,” said Jade Noble, owner of Frances. The local boutique in Phoenix highlights local makers and big brands alike.

“Anything and everything,” she said.

Instead of just one day, they’ve extended the shopping experience to the parking lot too, for every Saturday leading up to Christmas.

That’s where Sydney Cisco and her sister have set up shop.

“I am a maker, an artist and small business owner along with my sister,” said Cisco. “I make these art prints here, and my sister makes these earrings out of polymer clay.”

While these business owners are optimistic about the year ahead, they realize they’re up against some big challenges.

“It’s more difficult with increasing prices,” said Noble.

Record inflation is driving up the cost of doing business.

“You know something like a gift box last year would be 50 cents and this year it’s a dollar,” said Noble.

“Materials are getting a little bit more expensive, but one of our goals as makers is to keep everything affordable,” said Cisco. “…because we know that everyone is feeling it too.”

Customers like Lauren Armour are re-evaluating their spending habits.

“I think you have to be prepared to spend a little more this year,” she said. “Try to do local where I can, great fun places like this do discounts, so I can knock out a few birds with one stone.”

Business owners like Noble are doing what they can to stand out.

“If you buy something here, we’re going to wrap it,” said Noble, “We’re going to make it look really special for that person.”

While of course supporting each other while they’re at it.

“It can be a little dangerous for our profits that we have to dip into to support our friends… but always worth it,” said Cisco.

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