As small businesses everywhere continue to battle against obstacles thrown their way everyday, many may soon be contemplating a new strategy. With the holiday season beginning to rev up, it is likely to be a season unlike any other in history. As small businesses continue to adapt and adjust, it may be helpful to see where things may be headed. In a recent survey, the National Federation of Independent Business attempts to take the pulse of where things may be headed. The following is taken directly from that survey:
- The NFIB Research Center released its latest COVID-19 survey assessing how the COVID-19 pandemic has affected small businesses. This is the 20th survey in the series and includes updates on supply chain disruptions, the staffing shortage, and anticipations about the upcoming holiday season. The survey was conducted from October 25-27 with 613 responses collected.
- “Going into the busy holiday season, nearly half of small business owners who rely on holiday sales as a significant part of yearly revenue report that both the supply chain disruptions and the staffing shortage will impact their holiday sales,” said Holly Wade, Executive Director of NFIB’s Research Center. “Small employers continue to adjust their business operations and hiring practices to compensate for these issues, including for many dramatic price increases.”
- About half of small business owners (48%) reported that supply chain disruptions are having a significant impact on their business, almost unchanged from September’s survey.
- Another 34% of owners reported supply chain disruptions are having a moderate impact on their business and 12% said it has a mild impact on their business. Six percent of owners reported supply chain disruptions are not an issue.
- Supply chain disruptions are becoming increasingly challenging for many small business owners, with over half (62%) experiencing disruptions saying that the supply chain disruption is worse now than it was three months ago.
- Almost all small business owners (90%) anticipate the supply chain disruption that is impacting their business to continue for five or more months.
- About half of small business owners (48%) reported that supply chain disruptions are having a significant impact on their business, almost unchanged from September’s survey.
- Another 34% of owners reported supply chain disruptions are having a moderate impact on their business and 12% said it has a mild impact on their business. Six percent of owners reported supply chain disruptions are not an issue.
- Supply chain disruptions are becoming increasingly challenging for many small business owners, with over half (62%) experiencing disruptions saying that the supply chain disruption is worse now than it was three months ago.
- Almost all small business owners (90%) anticipate the supply chain disruption that is impacting their business to continue for five or more months.
- Sixty-nine percent of small business owners have increased their average selling prices due to supply chain disruptions and/or increased compensation due to the staffing shortage.
- Of those who increase selling prices, 66% raised prices by 5% or more.
- When supply chain disruptions and/or the staffing shortage normalizes, 34% anticipate slowing the pace of price increases and 9% anticipate suspending price increases. About one-in-ten (21%) expect to continue accelerated price increases. Only 5% anticipate lowering their prices.
- Of small business owners who rely on holiday sales for a significant part of yearly revenue, about half (49%) of them believe both supply chain and staffing issues will impact holiday sales. Seven percent anticipate only staffing shortages will impact holiday sales and 38% just supply chain disruptions.
- Twenty-six percent of owners anticipate these issues will have a significant negative impact on their business, about half (42%) reported a moderate negative impact, and 25% reported a mild impact.
- Of those who rely on holiday sales, about one-third (32%) are planning to promote their business or participate in events related to Small Business Saturday and another 33% are considering it.
- Eighteen percent of small business owners report that economic conditions are back to normal now in their area. Seven percent of owners anticipate it taking until the second half of 2021 and 17% anticipate sometime in the first half of 2022 before economic conditions return to pre-crisis levels.
- Thirty-two percent of owners are less optimistic and expect conditions not to fully improve until the second half of 2022 and 27% say after 2023.
-Written by Kevin Sawyer
