Are US small businesses on the road to recovery or do they continue to face tough challenges not entirely of their own making? The last couple of years has certainly tested the resolve of many a small business owner and entrepreneur. Is stability just around the corner or will uncertainty remain the major challenge? In some recently released research, the National Federation of Independent Businesses sought to take the pulse of the country’s small businesses and found some surprising answers. The following is taken directly from their recently published report:
- About three-quarters (73%) of small business owners have increased their average selling prices due to supply chain disruptions and/or increased compensation due to staffing shortages.
- Of those who raised prices, 44% have raised prices by 10% or more, another 30% have raised prices by 5% – 9.9%.
- Over half (51%) of small business owners reported supply chain disruptions had a significant impact on their business. Another 30% of owners reported it had a moderate impact and 14% reported a mild impact.
- Eighty percent of small business owners experiencing supply chain disruptions reported that the disruption is causing lost sales opportunities to some degree.
- Forty-five percent of owners experiencing disruptions reported it is worse now than it was three months ago.
- Half (50%) of owners reported about the same level of disruption from last quarter and 4% reported it easing up from three months ago.
- The vast majority (89%) of small business owners anticipate the supply chain disruption that is impacting their business to continue for five months or more.
- Twenty-four percent of owners are currently experiencing a significant staffing shortage and another 18% are currently experiencing a moderate
- Of those owners currently experiencing a staffing shortage, 23% are experiencing a significant loss of sales opportunities and 22% reported a moderate loss of sales opportunities because of the staffing shortage. The severity of lost sales opportunities has lessened in recent months due to more owners successfully adjusting operations to accommodate demand.
- When asked what adjustments, beyond normal hiring practices, small employers have taken steps to attract open positions, 85% reported increasing wages, 28% increased paid time off, and 22% offered or enhanced hiring bonuses.
- Eighteen percent of small employers offered or enhanced referral bonuses and another 27% offered or enhanced insurance benefits.
- When asked what adjustments have been made in business operations to compensate for the staffing shortage, 43% of small employers experiencing a staffing shortage are offering more hours to part-time employees.
- Sixty-two percent of owners are offering overtime to full-time employees, almost all (91%) employers responded that the owner(s) are working more hours. Over one-third of owners (39%) have resorted to more drastic measures with adjusting business operation hours. Thirty-six percent of employers have introduced new technology to enhance productivity and 37% have reduced the variety of goods and services sold.
- Over one-third (35%) of small businesses are at or exceeding pre-crisis sales levels, a nine-percentage point increase from early September.
- Thirty-two percent of businesses are back or nearly back to where they were with sales 75% – 99% of pre-crisis levels with another 22% at sales levels of 50% – 74% pre-crisis.
- Almost one-quarter (24%) of owners reported that economic conditions are back to normal now in their area.
- Ten percent of owners anticipate an economic recovery in the first half of 2022 and another 19% anticipate the second half of 2022 before economic conditions return to pre-crisis levels.
- Nearly half (48%) of small business owners are less optimistic and expect conditions not to fully improve until 2023 or later.
-Written by Kevin Sawyer