December 15, 2021
C-Suite Wednesday – Small Business Owners are the Most Optimistic in Q4 Since Pre-Pandemic
“The survey—conducted between October 13 – 27, 2021 as COVID-19 cases began receding nationally—reflects both higher optimism about next year and slightly better outlooks on overall business health,” reads the MetLife & U.S. Chamber of Commerce’s Small Business Index for the fourth quarter. “However, small business owners’ sentiment and the Index score have fluctuated more than usual throughout 2021, indicating that small businesses continue to face uncertainty as they try to navigate the evolving pandemic situation and plan for the future.”
In the highest score since the pandemic started, the Small Business Index score for the fourth quarter of 2021 was 63. 62% of small businesses state that their business is in good health, and 30% of small businesses believe their business is in very good health. Further expressing their optimism, two-thirds of small business owners are comfortable with their cash flow. Even though many small business owners believe their business is in good health and are comfortable with their cash flow, seven in ten small businesses say that this holiday season is crucial for their yearly earnings.
Currently, small business owners are most concerned about inflation, supply chain disruptions, and labor shortages. Almost three-quarters of owners are worried about the impact inflation will have on their business. 71% of small business owners say that rising prices are having a significant impact on their business. This is has led to 63% of owners raising the prices of their products or services. Supply chain disruptions correlated to the pandemic have affected 61% of small businesses, and more than half of small businesses (55%) report that worker shortages have disrupted their business.
Going into the new year, 38% of small business owners are planning to increase staffing levels, and 42% plan to invest in their business. Most small business owners expect higher revenues in the upcoming year (59%), and 28% expect their revenue to stay the same. On the other hand, the biggest challenge that 26% of small business owners expect to share in the future is revenue. The second and third challenges that follow are inflation (23%) and COVID-19 compliance (21%).