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Closure of beloved California bookstore highlights struggles of small businesses in expensive state

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Last Updated on February 28, 2024 by Robert C. Hoopes

A recent report sheds light on the difficulties faced by small businesses in California, particularly in the aftermath of the COVID-19 pandemic. One example highlighted in the report is the closure of Karen Kropp’s Book Rack bookstore in Arcadia, which had been in operation for 40 years.

Kropp, now 79 years old, was forced to cash out her life insurance policy in a last-ditch effort to keep the bookstore afloat. However, with the rise of online shopping and the lingering impact of the pandemic, sales continued to decline. Ultimately, Kropp made the difficult decision to retire and will rely on her Social Security check to make ends meet in Albuquerque.

The challenges faced by Kropp are not unique, as many aging small-business owners in California are grappling with financial woes and uncertainties about the future of their businesses. Experts have estimated that single renters in L.A. County need nearly $3,000 a month just to cover basic necessities, adding to the financial strain.

The report also points to the influence of e-commerce giants like Amazon and the burdensome regulations imposed by the state as contributing factors to the struggles of small businesses in California. Some business owners have voiced frustration over the state’s restrictive policies, which they claim hinder their ability to operate successfully.

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The high cost of living in California has also driven some residents to seek greener pastures elsewhere. Attorney Krystle Meyer, for example, recently made the decision to leave the state, citing financial pressures, rising homelessness rates, and dissatisfaction with California’s COVID-19 restrictions as motivating factors. As more small businesses grapple with similar challenges, the future remains uncertain for California’s economic landscape.

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Dina J. Miller is an accomplished writer and editor with a passion for business and education. With over a decade of experience in the industry, she has established herself as a leading voice in the MBA community. Her work can be found in a variety of MBA magazines and college publications, where she provides insightful commentary on current trends and issues in the field. Dina's expertise in business and education stems from her extensive academic background. She holds a Master's degree in Business Administration from a top-tier business school, where she excelled in her studies and developed a deep understanding of the complexities of the business world. Her academic achievements have been recognized with numerous awards and honors, including induction into several prestigious academic societies.

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