Perspective on the recent Michigan Future Business Index by Carol Cain
Free Press Business Columnist
Entrepreneur Darrell Thomas acquired Corporate Cars LLC in 2018 when business and leisure travel were flying high and so, too, was his Detroit-based company, which provides transportation for corporate and individual clients across the region.
“Our business grew 20% that following year, and things were rolling along. When the pandemic hit, we went from having 200 reservations a month to zero for a stretch of about four months in 2020,” he said.
Corporate Cars, a Detroit-based transportation service, has seen a rebound in business since the pandemic but inflation is an issue, image provided by Corporate Cars
His wife, LaShawn Thomas, a partner in the company, also works full-time at another job, which provided a much-needed lifeline during that difficult stretch. Thomas said he applied for but didn’t receive PPP funds.
“Thank God she was working, or I am not sure what we would have done,” Darrell Thomas (left) said.
Things have continued to rebound for Corporate Cars as the pandemic has eased and travel is rebounding. But now, inflation is something else Thomas is having to contend with as it impacts his company and his clients, which include pro athletes, Henry Ford Health, Strategic Staffing Solutions, and the Charles H. Wright Museum of African American History.
“Like a lot of businesses, inflation has had a huge impact on us,” Thomas said. “Even though we did more trips in 2022 (than 2021), profits aren’t what we’d like to see because everything, from gas to wages has cost us more.”
He’s not alone in voicing concern about inflation as the latest Michigan Future Business Index survey of 750 small to medium-sized businesses across Michigan found. Survey results were released in January.
“Inflation remains the No. 1 challenge to doing business, and that includes wage inflation, which is impacting profits and hiring,” said Chris Holman, founder, and CEO of Michigan Business Network, which commissioned the semi-annual study, sponsored by Cinnaire and conducted by ROI Insight.
Michigan Business Network CEO Chris Holman speaks on Jan. 11th at Friendship Hall, Capital Region International Airport during the MBN Speakers Series 2023 Mid-Michigan Economic Forecast Breakfast, photo: Benjamin Robinson
Holman, who served as the small-business advocate for the state of Michigan under former Gov. Jennifer Granholm, also chaired the Small Business Association of Michigan and National Small Business Association. He’s started and sold businesses and has his pulse on small business like few others in the state.
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How small and medium-sized businesses across Michigan fare is critical to all of us as they remain a driver of our economy.
“Small businesses play a critical role in supporting our communities, creating jobs, and spurring economic development,” said Holman.
Holman said the latest survey found wage inflation stress is growing, as overall inflation continues to impact profits. But the supply chain challenges of 2022 were starting to subside.
“Additionally, more than 1 in 4 respondents say they’ve fully recovered from the COVID-19 pandemic,” Holman added.
The second-biggest concern for businesses is talent, which had dominated the survey in recent years.
“The need for talent, and retention of that talent, slipped to No. 2 on this latest survey,” Holman said. “The worst part of this is that inflation will turn itself around as conditions change. But the talent problem will not. In many cases, it’s simply a matter of not enough people entering the workforce to replace the enormous number of baby boomers leaving.”
Holman added that businesses are “going to have to be much more creative in their hiring practices. They’re going to have to invest more in technology and automation and we are going to have to do something about immigration reform.”
Another issue for businesses according to the survey: health care costs.
“Several years ago, health care costs was one of the top, if not the top, concern of businesses,” Holman said. “It disappeared from the top 10 for a number of years but has resurfaced as it moved to (the) No. 3 spot in our newest survey. This adds to wage inflation and further cuts the margin of businesses. ”
In spite of the challenges, Holman added, “the majority of Michigan businesses said they still find our state a great place to be in business. And they are cautiously optimistic about the next six months.”
Count Thomas among them.
“We have six drivers, including myself, and five vehicles,” he said. “We’re planning on adding two more vehicles and two more drivers. Once we’ve added a few more drivers, it’ll give me the opportunity to spend time networking to help grow the company.”
Contact Carol Cain: 248-355-7126 or clcain@cbs.com. She is senior producer/host of “Michigan Matters,” which airs at 8 a.m. Sundays on CBS Detroit. See Allegra Baistrocchi, consulate of Italy in Detroit, Franco Bianchi, CEO of Haworth Inc., and Italian designer Roberto Palomba on this Sunday’s show.
