September 14, 2022
C-Suite Wednesday – Small Business Owners Fear Customers Will Turn to Big Businesses
“The impact of COVID-19 on small businesses and communities all over the world is significant,” reads a Goldman Sachs report released this month. Small business owners continue to deal with the economic conditions brought on by the pandemic.
Here are the facts:
• About half of small business owners believe the economy is worse than it was three months ago, while almost 20% think the economy has improved.
• 51% of small business owners say that the U.S. is “on the wrong track”, an 11% increase from September 2021. 29% believe we are heading in the right direction which is a 9% increase from September of last year.
• Based on their experiences with their business, 62% of the surveyed small business owners think the U.S. economy will experience a recession in the next year. Only 13% do not believe we will experience a recession.
• 43% of owners believe the U.S. economy is currently in a recession, and 38% do not think the U.S. is currently in a recession.
• Over half (54%) of small business owners have experienced a decline in customer demand.
• 29% of owners have had difficulty raising capital or are seeing higher borrowing costs in the last few months.
• 90% of small business owners say economic trends like inflation, supply chain issues, and workforce shortages are creating a negative impact on their business.
• More than two-thirds of owners increased their prices to offset the negative impact of their economic trends.
• Almost half of owners say workforce challenges are the most significant issue affecting their business. 30% say that inflation is their top issue.
• Nearly all small business owners (96%) say that inflationary pressures have increased or stayed the same for their business.
• Three-quarters of the surveyed owners report that their business’s financial health has been damaged by inflation.
• 83% of owners are worried that their customers will turn to big business due to their ability to withstand inflationary costs and offer lower prices.
• 64% of small business owners are currently hiring and 86% of those hiring say that it is difficult to find qualified candidates. 95% of those having difficulty with hiring say that it is affecting their bottom line.
• 60% of owners say they are having difficulty finding employees because big businesses offer better benefits (health insurance and retirement).
Goldman Sachs Report