(This column originally appeared in the Inquirer)
2026 has had its challenges for Rachael Compton, founder of Fairmount jewelry story, Aiyah.
“This year we’ve seen a lot of growth” she said. “But honestly, it feels pretty bad right now. Everything — gas, materials, utilities, subscriptions — is expensive. It feels like every day I’m being charged for something new or getting an email telling me that something I’m already paying for is about to cost more.”
According to many recent surveys, most small business owners across the country, like Compton, appear resilient even in the face of increased expenses, a tight labor market, higher financing costs and uncertainty about the economy. Many report steady hiring, more manufacturing and service activity, and higher revenues.
That may be good for Republican Congressional candidates, who are trailing in many polls. But optimism is still muted and the outlook is mixed.
Businesses in the Philadelphia area are no different.
Growth continues, but higher costs are taking a bite
Charnice Barrett, has seen growth this year in her Northeast Philadelphia waxing business, Black Lotus Skincare. But 2026 has also been a year of increasing costs.
“Between operating expenses, supplies, marketing, and the rising cost of doing business, my store’s profitability has required constant attention,” Barrett said.
At Aiyah, Compton has raised prices, but only because her expenses have increased significantly. Her business is impacted more than ever by commodity prices, such as gold, which got more expensive this year.
“The rising cost of gold alone has been a huge hurdle for us,” she said. “We’ve had to raise prices and rethink certain designs to keep pieces within our customers’ price ranges.”
Tara Sulimay Acosta, owner of Sulimay’s Salon and Barber Studio in Fairmount and Sulimay’s Studio on Main in Manayunk noted increased costs of labor, insurance, rent, taxes, utilities, advertising, and more.
“The cost of operating a business has increased significantly — and don’t even get me started on healthcare costs being outrageously unaffordable for small businesses,” she said.
Discretionary spending softens
Some business owners I interviewed are seeing a pullback in discretionary spending by their customers.
Acosta says she sees some of her clients “stretching” appointments — waiting longer between haircuts or color sessions — or more broadly reconsidering their frequency, affordability and priorities.
At Pilates by Valerie in Germantown, owner Valerie Plummer says revenues have recently declined after gaining during the summer. Financially, she said, 2026 has been “year of challenges.” But she doesn’t believe people have lost interest in their health.
“I think many are making difficult choices about what they can afford,” she said.
Barrett is seeing similar challenges.
“As a business owner in the beauty industry, I understand that services like waxing can be considered a luxury when households are trying to manage rising expenses,” she said.
But, Barrett added, “At the same time, I’ve learned that people will continue investing in services where they feel valued and receive a great experience.”
Businesses are persisting
“Costs are increasing, and I hear about this frequently from my clients,” said Giuseppe Bucci, an Abington-based certified public accountant. “But business owners who are more engaged know their numbers and are making the necessary adjustments.”
At Sulimay’s, salon owner Acosta says, that means continuing to provide options for different budgets and staying extremely mindful of business expenses, all while maintaining the quality and experience they are proud of and for which they’re known.
Bucci says word-of-mouth is important.
“Most of my business comes through referrals from existing clients rather than marketing, and this matters to me,” he said. ”It is all about client experience and if I am getting referrals this tells me I am doing it right.”
At Philadelphia boutique Ali’s Wagon, sales are almost exactly the same this year as they were in 2025. Owner Jessie Menken relies on customer loyalty, an inclusive atmosphere, and shoppers looking for a mood boost.
“After almost 20 years, a part of our business is being known as a space where everybody is welcome and people come to commiserate about world happenings,” Menken said. “When it feels like the sky is falling, people are compelled to buy the small pick-me-ups, which is essentially what our little business sells.”
Plummer, the pilates studio owner, has realized that it’s important to not rest on her laurels.
“One thing I’ve learned is that a few good months don’t necessarily mean you’ve established a trend,” said Plummer. ”You have to prepare for slower periods, remain flexible, and keep moving forward.”
Preparing for the future
While the acknowledged the challenges this year has brought, neither Plummer nor Barrett is letting higher interest rates and a slowing economy stop them.
Barrett expanded into a new location this year, “which required a significant investment.” Plummer grew her studio space, added new equipment, and developed new programs.
“Those investments reflect my confidence in the studio’s long-term potential, even as I navigate the challenges of slower revenue,” she said.
Heading into the midterm elections, Compton appears optimistic about 2027 and says that even in this “chaotic” world she’s doubling down on her local community.
“We have survived a recession, a pandemic, and another Trump presidency,” said boutique owner Menken. “I feel a strange sense of calm as a business owner.”
