Even in the most ideal of conditions, things are never easy for the small business owner. It seems that every time a small business owner turns around there is yet another obstacle placed in the road. So, what are the obstacles currently laying in the road? The US Chamber of Commerce recently partnered with MetLife to discover just what formidable challenges small business is currently facing. The following is taken directly from their recently published findings:
Inflation remains the number one concern for small businesses by far, with more than half (53%) of them saying inflation is the biggest challenge they face. Inflation topped the list of challenges for the entirety of 2022 and is up a whopping 30-percentage-points year-over-year. It doesn’t matter what size your small businesses or where it’s located: Inflation is the top concern for small businesses regardless of location, number of employees, or sector.
In the latest Index, 22% of small businesses reported revenue generation as a top concern. As the costs of supplies and labor rose due to inflation, small businesses struggled to generate revenue. In Q4 2022, nearly 7 in 10 small business owners said they raised prices to cope with rising inflation.
Rising interest rates are top-of-mind too, with 16% of small businesses saying rising interest rates are a top concern (up slightly from 14% in Q3). In an attempt to tamper rapid inflation, the Federal Reserve has been raising interest rates. But for small business owners who often rely on credit and loans to finance their business operations, rising interest rates are pressing concern—they essentially increase the cost of doing business.
- Concerns over supply chain issues have cooled off slightly, with just one in five (20%) small businesses citing supply chain issues as a top challenge now (down from 26% in Q3 2022). Small businesses in the manufacturing sector are most impacted by supply chains issues (29% said it was a top issue), while services are the least impacted (only 10% report supply chains as a top challenge).
- Concern about access to financing has continued to tick up over the last year, climbing from six percent of small business owners saying it was a top concern in the beginning of 2022 (Q1 2022) to 13% citing it as a top concern by the end of the year (Q4 2022). The size of the company has an impact on whether finding a loan or credit is a top challenge. 15% of businesses with 1-4 employees said access to capital was a challenge, while just 6% of small businesses with 20-500 employees said it was.
-Written by Kevin Sawyer