Expense Surge: Local companies traverse ongoing shifts in costs of doing business 

Amid ongoing concerns of tariffs and stubborn inflation – as the U.S. Federal Reserve ponders a possible interest rate cut for its upcoming meeting this month – local business leaders are wary of present and oncoming expenses for their ventures.

With over 40 years of experience in construction, GR Stovall, president of DeWitt & Associates Inc., says the cost of doing business seems to be up in every industry.

“Everything costs more now than it used to,” Stovall says. “And that is an indicator that it’s going to continue to cost more. I’m not taking that as a hardship in the construction industry.”

Still, he says the ingredients of rising business costs, such as labor, equipment and materials, are frustrations to which employers need to get accustomed. While DeWitt & Associates had higher year-over-year expenses, Stovall says the general contracting firm doesn’t make it a point to track its cost of jobs from one year to the next. Each one – be it for a government entity, higher education institution or health care provider – has a different personality, he says.

“We track our job costs and make sure that we’re anticipating future costs based on the way things are escalating,” he says. “We just have to take every single job as it comes and do our best job of anticipating costs on that job based on everything from current economy to the cost of goods and the labor that’s necessary.”

Investing in labor is among challenges faced at Craft Sushi, says co-owner Jenny Cho. After making its Queen City debut in 2018, the eatery’s second location opened in 2022. Cho, who co-owns the business with her husband Michael, says Craft Sushi has increased its base pay by $3 per hour over the past several years. Since the start of the year, they’ve also provided additional pay raises to various staff of $1-$2 per hour. The hourly paid staff is averaging $16-$19 per hour.

Still, Cho says the stores need more employees. The current 22-employee staff is around 20% smaller than it was at this time last year.

“For a small business, that’s definitely a substantial hit,” she says.

Participants in Springfield Business Journal’s 2025 Economic Growth Survey said employee wages and benefits were the top factor driving up the cost of doing business.

In the survey, 43% of respondents chose employee pay as the top choice, while 28% selected the cost of goods and materials as No. 1.

Additionally, 83% of this year’s respondents said the cost of doing business worsened over the past year, up slightly from 80% in 2024’s survey.

Talking tariffs
The labor concern at Craft Sushi comes at a time when the restaurant also is dealing with higher costs for equipment and products for its menu. Cho says a vendor in Asia told Craft Sushi recently that some ingredients imported to the stores can soon expect to have a 5%-15% hike due to tariffs. Those include Vietnamese sweet chili sauce, fish sauce and umami sauces.

“They can’t give us an exact date, and we don’t know if that’s going to change again,” she says. “It’s almost like we have to prepare for it and then figure out whether or not we’re going to raise prices. But we’re not going to raise prices substantially before we feel that hit because you can’t go back down after that.”

At Holloway America, which custom designs, engineers and fabricates pressure vessels in its Springfield manufacturing facility, co-owner Randy Colwell says when President Donald Trump began escalating trade wars earlier this year, the threat of tariffs seemed to cause “a little bit of panic” in his industry.

“When the tariffs were first announced, I think everybody of course has a knee-jerk reaction because of the unknowns,” he says. “What we saw in our business was virtually immediately, everybody came out on a protective measure saying, ‘We reserve the right to increase prices. We reserve the right to add surcharges.’”

While Colwell says some in the manufacturing industry maybe had fears of 15%-30% tariffs, Holloway America didn’t share those same concerns.

“On our end, we didn’t really worry about it too much because most of our equipment and materials that we buy are domestic in nature,” he says, noting the company was “pretty protected” from tariffs. He estimated 90% of the materials that comprise the tanks they supply come from the U.S.

Colwell says after about 30-60 days, prices started stabilizing for some of the auxiliary components for its vessels, such as mixers and valves that come from Germany and Sweden, among other countries.

“So, what our customers really saw was, in some cases, only about a 1%-4% price increase,” he says.

Stovall, with DeWitt & Associates Inc., says tariffs are an unpredictable component of business costs.

“I don’t want to necessarily intertwine tariffs and procurement challenges or workforce challenges, but all these are unknowns,” he says. “We have to expect that those kind of challenges are coming.”

Steel is probably the most discussed material that is impacting job costs currently, Stovall says. Aside from structural steel, the material also is used in electrical conduit and plumbing piping.

“When we talk about steel tariffs and the effect of that, and when you think about industry as a whole, it could be in a lot of different areas,” he says. “I can’t say that it’s particularly volatile at this point in time, but it’s something we consider on every project as we begin to talk numbers and budget and timeline, etc.”

Making a plan
Upgrading and replacing equipment is a necessity in the restaurant industry, and Cho says Craft Sushi is eyeing a purchase of a machine that it will likely need to source from Japan.

“We call it our sushi machine,” she says. “It lays the rice onto the seaweed for sushi roll-making and streamlines our entire process. We know certain parts tend to break down every few years, so we like to have one or two of those on hand because if that machine goes down, it’s a bad day for the restaurant.”

Still, Cho says the cost and getting on a waiting list that could be six months to a year are a couple of drawbacks to making the investment.

“It was about $14,000 when we purchased our second store, and I’m willing to bet it’s substantially higher now,” she says.

Like Craft Sushi, adding to the workforce is a desire at Holloway America. Colwell says the company currently has 185 employees – an all-time high.

“We are looking to add at least 15 people to the company,” he says, adding those include assemblers, machinists, polishers and welders. “We will probably punch north of 200 by the end of the year.”

Cho says she and her husband are doing market research all the time on menu pricing. The restaurant last raised prices about six months ago, a decision Cho says stressed her out. Certain items increased by around 35-50 cents.

“And that’s horrible to say, honestly,” she says. “I feel like you shouldn’t have to raise prices every six months to a year, but I think we’re in a new way of life.”

Cho says they were nervous about the decision, and business took a hit as a result.

“It’s that delicate dance,” she says of pricing the menu to be profitable – but not too expensive for customers.

“Well, we want to do both,” she says. “So how do we do that? There’s layers and layers and layers behind that price. It is deflating and frustrating sometimes when you have people complain about that.”