Income decreases while the cost of living rises

·2 min read

Although it sits along a major highway leading to the north, the town has not seen much economic business growth or increased population size. Living in a small community does offer one significant advantage, and that is having the opportunity to develop close relations with those around you and the sense of that small-town feel it creates. These types of communities can be comforting but also be a double-edged sword for its residents.

While being amongst a smaller population can have its benefits, it also leads to higher taxes as there are fewer people to spread the municipal costs with each year. Another is the higher cost of living such as fuel, utility services, food, and retail purchases that go along with living in remote rural community. With limited resources available and the cost of living that is continually rising, it can all be a tough pill for many residents to swallow. It becomes a tug-of-war with your conscience of overpaying for supplies to support local or make the commute to a neighbouring town where there’s ample variety, and the costs are more favourable to the pocketbook.

It would be great to have more stores to choose from to shop, and business competition is healthy and helps level the playing field. However, having a small population and a lower base of shoppers can make it quite difficult for new businesses to develop in town and remain profitable, more so if a similar one already exists. Why is the cost of living so much higher than the next town over? According to many business and financial advisors, there are five factors business owners consider when pricing goods and services. The main one is the cost of operating that specific business, which includes overhead, fixed costs, and product delivery expenses. Next is the customer, which is key in determining prices. In towns like Fox Creek, prices may be much higher because there are no other options other than for shoppers to buy or go without. Next is positioning, followed by competition. Having competition helps to set benchmark prices, but if there are no other stores, there’s no fair benchmark pricing to meet, and it now becomes the owner’s discretion. The last is profit, which financial advisors have said many business owners tend to neglect giving consideration.

Is there a happy medium in owning a business that can profit while keeping within residents’ financial needs? The answer should be yes, as, without customers, there is no business.

Vicki Winger, Local Journalism Initiative Reporter, Whitecourt Press