Nov. 19, 2023

Let me let you in on a rarely spoken truth about being a business owner.

No matter what is actually happening in your business, whenever anyone asks how things are going, most business owners are going to tell you things are just fine.

“Good!” They might exclaim, while avoiding eye contact if you look closely.

“Not bad!” they might reply, while actually thinking about their shrinking margin and mounting overhead.

I’ve found it’s very hard for owners to acknowledge when sales aren’t going in the direction they need them to go. There’s a fear, I think, that somehow this reflects on you as a business owner rather than the broader market conditions or that it makes people less inclined to support you versus more.

With that in mind, I’m thankful so many local small-business owners trust me enough to – I think, anyway – tell it like it is to me. And, even more so, that they increasingly have the confidence to say the same thing publicly that they tell me privately.

“I would say over the last couple months it’s definitely down, but particularly usually in the fourth quarter we do really well, and that helps make our year,” said Leslie Dolby, who owns DART Boutique at The Bridges at 57th. “October, I was down almost 20 percent. I’m down 20 percent now from last year, which is very unusual.”

She started the business in 2019, made it through the pandemic and in 2021 “noticed an uptick when people were really pushing shop small, support local,” she continued.

“So I feel like we did well and ramped up, and now it’s declining again into this economic slump. It just seems like more and more people are getting used to staying home, ordering stuff from the couch – cheap stuff wherever they can get a deal rather than going into a retail store and experiencing that.”

She’s bold enough to say what I think many small-business owners would echo. As part of a group of fellow entrepreneurs, Dolby knows she’s not alone too.

“We’re all feeling it economically,” she said. “It’s not just business owners. It’s in our personal lives too. We’re all feeling that crunch – gas is more expensive, food, everything is going up, but our incomes aren’t necessarily going up. As a small-business owner, if we were to raise our prices, people wouldn’t shop with us. But I have to raise pay for my staff to keep good workers, and that’s the frustrating part. It’s a no-win situation if people don’t come out and shop.”

Upstairs from Dolby’s boutique at The Bridges, I talked with Oh My Cupcakes owner Melissa Johnson, who could relate.

“I resonate with Leslie,” she told me. “Early into the pandemic and through the pandemic, there was such a focus on making sure our local businesses survived, and Sioux Falls has been great to support local, but I think overall everyone is tired.”

While a new mobile cupcake experience “carried our summer … October was really difficult,” Johnson continued. “People are looking for convenience wherever they can find it. Our foot traffic is definitely down, and it is a little demoralizing because we create these beautiful spaces.”

The store now uses DoorDash, even though that keeps customers from experiencing the store’s festive decor and potential impulse buys. Prices have gone up some, but so has employee pay, utilities, ingredient prices and rent.

Johnson acknowledges the simple truth about her business in challenging economic times too.

“If people are making choices between groceries and gas or cupcakes, I don’t blame them for making hard choices,” she said. “Every business owner I know right now is trying to figure out what the heck consumers are doing, and thinking about how best to reach them. We’re all adapting and pivoting in different ways than before, but that’s also how business goes.”

Other outside threats to local retailers are multiplying in some daunting ways. This no longer just is a battle against the Amazons, Walmarts and Targets of the world. It’s a battle against Chinese e-commerce giants Temu, Shein, TikTok Shop and whatever surfaces next, offering direct wholesale-style access to foreign-made goods in return for – let’s just call it like it is – your data, purchasing history and payment information.

We’ll get a better idea later this month of how sales are trending locally when the city releases its most recent sales tax report but don’t be surprised if we’re lagging behind last year.

That makes it increasingly critical that our local businesses enjoy a strong holiday season. As you’re making your gifting decision – corporate, personal or even a little gift to yourself – try to think local first.

To be clear, any business has to earn your business. I think local retailers know that, but that also has been reinforced in recent months. Your inventory, your pricing, your service all have to meet today’s customer in the moment where that customer exists.

Back in DART Boutique, “I constantly try to change and pivot and respond to what people are looking for,” Dolby said. “I’ve started getting more gift items because even if people don’t buy clothes for themselves, they might buy gifts for someone else.”

The small retailers I talked to all mentioned being willing to go above and beyond for a customer, whether it’s shipping, customizing or hosting special events. But it’s on us to reciprocate as we can too.

Here’s my challenge in the few weeks ahead: Try to make time in your schedule for shopping local. Maybe go over lunch near your workplace. Head downtown on a weekend to see the newly announced Winter Weekends programming, but shop and dine locally while you’re there. Don’t forget to stop by our annual 605 Made Holiday Market on Dec. 2, where we’ll sell locally made merchandise from dozens of makers. If we all do a little extra to support local, it’s going to add up. If we don’t, I’m afraid some of these businesses won’t be here next holiday season – and the community impact of that goes beyond any one storefront.

“It’s really scary,” Dolby said. “If we don’t have income coming in, how do we afford to keep going? I donate all the time to silent auctions and try to do what I can for the community, but you can’t do that if you’re not here.”

Retailers bank on strong start to holiday sales, with staying power