Rural businesses feeling the pinch of post-pandemic problems

Tuesday, September 27, 2022
Andy Medici, Business Journal

 

Teddi Maslowski with some of her animals at Birch Creek Farmery.

Teddi Maslowski with some of her animals at Birch Creek Farmery.

Teddi Maslowski, owner of Birch Creek Farmery in Burgettstown, Pennsylvania, has big plans for their heritage breed, pasture-raised, ethically-raised meats.

That optimism persists even as supply chain disruptions have meant it has taken eight months to get ear tags for some of her animals, and a driver shortage means it can take anywhere from two to 10 days to get oats and barley.

Teddi, who runs the business with her husband Chris, has navigated feed prices spiking anywhere from 24% to 68%, depending on the item, with shortages of selenium and cobalt — a vital ingredient that boosts their animals' immune systems and keeps their animals healthy.

“You manage it the best you can, but really the last few years our No. 1 priority is learning to adapt and building a business that can take hits,” she said in an interview with The Playbook. “It’s not trying to negate them and prevent them. It's hitting them head on. I think that is something good.”

Now, she has an 80-page spreadsheet that automatically calculates how the price changes on all of her supplies and items affects her eventual market price, because in agriculture, even a 1% or 2% change can make or break a business. Her plans for growth, which involve brining her meat processing in house, has also meant navigating a labor shortage that Masloswki simply described as “terrible.”

“If we have 50 people apply, 21 respond for an interview. One will show up and that one will work six to eight works at 50% effort,” Maslowski said. That has led to a lot of sleepless nights for the Maslowskis, as well as waking up at dawn and going to bed late to help make up for the lack of workers.

That means her future plans for growth include a doubling of the minimum wage and good benefits in an effort to attract the workers they need and to keep them long term. Another adaptation has meant slowly switching from retail sales purely to purely commercial sales to businesses and restaurants because they simply don’t have the manpower to pack and ship individual orders and man a retail customer service counter.

Even as small-business owners across the country have struggled under a seemingly-unending chain of economic and health crises, there is a divide between rural and urban businesses, according to a new report by small business mentoring organization SCORE, which offers free services for small-business owners. Rural businesses employ more people in areas where poverty is often higher, and their challenges are often different.

Owners of rural businesses are far more likely to say population trends, such as the movement of workers from big cities to smaller cities and a relatively flat population in rural areas, has impacted their business. About 45.3% of rural owners say they have been significantly impacted, compared to 25.5% of urban owners.

About 36% of rural business owners are struggling to find qualified workers in their areas. About 49.3% cite high fuel costs as challenges to growth. High-speed internet is also a source of contention, with rural owners, at 19.2%, being twice as likely as nonrural owners, at 9%, to say internet access is a challenge.

Overall, rural owners are slightly more anxious about the economy. More than half of them (53.3%) said they felt somewhat or extremely negative about the economy, compared to 42.9% of nonrural owners.

Overall, rural owners are far more worried about higher costs of doing business, higher prices from vendors and higher financing costs than their nonrural counterparts, according to the SCORE report. Rural business owners are also more than twice as likely to say that a challenge to obtaining financing is a lack of banks in their area.

For Maslowski, the weather can end up knocking out power for days, so they store their meat off-site in an area with a more stable power grid, which can cause headaches when getting orders to customers. Lack of cell phone service or reliable internet has led to missed important calls or orders.

“We miss business calls or are slow to reply. We literally cannot get these notifications here,” Maslowski said. “The internet is terrible out here — it's worse than dialup if you measure it. It's a lot of pieces that add up.”

“I do think they have some specific concerns that are a product of their location,” said SCORE Vice President of External Relations Betsy Dougert. “These challenges really compounding and coming to a head.”

She said the pandemic has been a real reckoning as it has thrown into overdrive a lot of problems that have been simmering for years. Now, those same business owners need to plan for an unpredictable future and great unknowns — all of which can be anxiety-inducing, she said.

Internet access is an even more thorny issue as digital tools become even more ingrained in small-business operations and in customer expectations, making it harder to bring in new customers, Dougert said.

“It's even a deeper problem than we realize, and it's a tough one. What I tend to see is people relying on technology as an answer. If that access is not reliable then what's left? How do we reach the people who still need help?” Dougert asked.

SCORE can pair small-business owners with experienced mentors that can provide not just advice but a supportive ear. Someone who can see the particulars in every unique business and offer help. SCORE also has a website full of resources for small-business owners, she said.

“One of the best things a business owner can do is get an experienced mentor to help them out,” she said.

Maslowski got a mentor through SCORE who helped her develop the aforementioned spreadsheets and pushed her to analyze every aspect of her business to ensure it led them toward their goal. That analysis led to a solid business plan that helped them secure loans and grants on short notice.

“It has created so many opportunities for us that we can make decisions quickly. That was on SCORE. I would recommend it to anybody even if they have a business degree,” Maslowski said.

 

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