Small Business

Living in Fear of the Fiscal Cliff?

Fiscal Cliff
Steve McAlister | Photodisc | Getty Images

The fiscal cliff, slowing U.S. growth, the U.S. election, Europe and even the weather are keeping small business owners up at night. But which of these factors is having the biggest impact on their business varies.

Beezer Molten, founder of Half-Moon Outfitters in Charleston, S.C., said something is impacting his business and there's been a slowdown but it doesn't appear to be consumers worrying about the fiscal cliff — potentially higher taxes at the end of the year because of budget fights in Washington — or Europe's debt crisis.

Instead, Molten blames the challenges of managing his company's inventories after the warmer winter on weaker sales.

“It’s been very hard to get inventory right. I think that’s true from the big vendors to the smallest mom-and-pops,” on Tuesday. “That creates a promotional environment which makes it hard to maintain margin.” Half-Moon is getting traffic, but prices are getting squeezed, he said.

At California casual Italian dining chain Maria’s Italian Kitchen, owner Madelyn Alfano has cut back on promotions to focus on providing value and great service so customers keep returning.

She told CNBC, “I would say the wealthier customers are back, and their spending habits are good.” Middle-income consumers are dining out more as a luxury, she noted. That has pushed customer counts down, but sales are up.

— By's Justin Menza.

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