If you’re an entrepreneur or a small business owner, it can often feel like you’re always working. For Melissa Winwood, this is not just a feeling.
“We answer the phone 24 hours a day, seven days a week,” she told the Texas Standard.
Winwood is president of Winwood Motor Company, a towing and transport company in Santa Fe, Texas. After more than two decades in business, she and her husband Albert Winwood have managed to build up a fleet of five tow trucks.
“We tow for individuals, we tow for school districts. We have about 12 shops that we tow for in our surrounding area,” says Melissa Winwood.
Despite this success, Winwood says that as business owners, she and her family are focused on one thing: “survival.”
The economic outlook
New data from the Dallas Federal Reserve shows that general business activity in Texas has fallen – which means that increasingly, entrepreneurs are reconsidering or holding off on large investments for their businesses.
Part of this slowdown in activity is due to rising costs for everyday business expenses, a factor that has put Winwood Motor Company in “maintenance mode,” according to Melissa Winwood.
Rising fuel and insurance costs have made a standard, cross-town tow – which costs $65 – less profitable for the Winwoods.
“Regardless of whether fuel is almost $4 a gallon or it’s $250 a gallon, [we still charge] $65,” Melissa Winwood said.
Right now, these rising operating costs are clashing with a powerful piece of macroeconomic policy: rising interest rates.
As the Federal Reserve has raised interest rates over the past year, the cost of taking out loans has gone up considerably.
The Winwoods are currently deciding whether or not to purchase another tow truck for around $85,000 – a large business investment that would require financing. But over the past year, they noticed the cost of borrowing money has gone up.
“The interest rate last year was 5.8%. This year, I’m paying 10%,” Melissa Winwood said.