T.J. Tollakson has faced many of the pandemic-worsened business issues detailed in a Goldman Sachs survey released Wednesday.
His performance Dimond bikes were hard to sell in a year when triathletes, the key market, were sidelined by canceled events. They weren’t buying the high-end triathlon bikes, or the travel bags designed to carry the bikes on planes.
But Tollakson managed to save the business, part of his Ruster Sports company, in part by accelerating his rollout of dirt and gravel bikes, which sold well.
Did they save the company?
“There’s no question about it,” Tollakson said in an interview. “If we had to rely 100% on just triathlon bikes last year, and bicycle travel cases, we would be in a very difficult spot right now.”
Instead, Tollakson is trying to add a staffer or two to his six-person manufacturing company located on the south edge of downtown Des Moines. But he is running into familiar problems. Many job candidates don’t have the right skills, and trained bike mechanics demand higher salaries in an age of worker shortages.
Ruster also is having serious supply chain problems. The parts coming from Taiwan, the epicenter of bicycle production, and product from other Asia outlets arrives only sporadically, Tollakson said. So people who have ordered bikes are waiting much longer than usual.
“The hardest part of moving forward has been sourcing inventory for components on the bikes themselves,” Tollakson said. “We’ve had a few raw materials sourcing problems as well, and obviously there has been just a huge amount of inflation as well.
“Not a lot of people want to buy a bicycle frame without full components so it works as a bicycle,” he added. “So we’ve had to get a little more creative with just how we’re doing business and how we’re managing to stay in business, to stay profitable.”
Goldman Sachs, which runs a small-business training program Tollakson completed two years ago, found in its latest survey of small businesses that 71% are hiring. But 81% are having trouble finding the right candidates.
The survey also found many businesses are afraid that when their federal pandemic aid runs out in July, they will have trouble making payroll. Many are calling for changes in the U.S. Small Business Administration standing loan programs to make it easier to get capital.
Tollakson, son of Hubbell Realty Co. President and CEO Rick Tollakson, has waited months for an increase in his SBA loan. He figures the biggest issue is the crunch that came when small businesses across the land looked for a way to weather the pandemic storm, and the government’s effort nationwide to fight widespread fraud on small-business loans.
Tollakson said he’s absorbed inflation so far, choosing not to raise prices. But Goldman Sachs found that 48% of survey respondents had increased prices, with 83% reporting higher operating costs and 82% worried about inflation.
Other key findings from the survey:
— 44% of respondents say their business still is struggling due to the pandemic.
— 67% said the nation is moving in the right direction.
— 82% of those who received a second stimulus loan expect to exhaust the money by the end of July. Less than a quarter, 24%, are “very confident” they will make payroll after that.
— 93% want Congress to review SBA loan terms.
— 88% want the federal government to do more business with small businesses.