As challenging economic conditions continue to plague US small businesses, it seems that, despite enormous challenges and roadblocks, small business owners continue to remain confident and optimistic. There remain more than a few hurdles but business owners and entrepreneurs continue to forge on and make the best of what comes at them. In a new small business index report, the US Chamber of Commerce and Metlife have taken the pulse of small business and have come up with some surprising results. The following is taken directly from that recent report:
- The Small Business Index is a premier tracker of U.S. small business sentiment and perspectives. The Index reports are released on a quarterly basis and are compiled from 750 unique interviews with small business owners and operators. It delivers a comprehensive quantitative snapshot of the small business sector.
- Despite a challenging economy, the current Small Business Index score reached a pandemic-era high of 66.8 this quarter. This is slightly higher than last quarter’s score of 64.1.
- Over the last five years, one key finding stands out: in a post-pandemic world with major labor shortages, small business owners report working longer hours than they used to. In fact, half (50%) of small business owners say they are working more hours now than they were a year ago. This question was first asked in the inaugural SBI (Q2 2017). Five years ago, 30% said they were working more hours. This equates to a very significant 20-percentage point increase in the share of small business owners that report working more hours.
- This quarter, small businesses say inflation is, by far, their top concern. Forty-four percent of the small businesses surveyed cite inflation as the biggest challenge facing small business owners, up from 33% last quarter. This is up significantly from 19% when the question was first asked in Q3 2021. Furthermore, nearly nine in ten (88%) are concerned about the impact of inflation on their business, with almost half (49%) indicating they are very concerned (up from 44% in Q1 2022 and 31% in Q4 2021)
- To keep up, many small businesses report raising the prices they charge customers. A strong majority (69%) of small businesses surveyed report raising the prices of their products or services due to inflation in the past year. This is consistent with the 67% that reported raising their prices due to inflation last quarter. Nearly half (46%) report having taken out a loan to cover higher costs due to inflation (up from 39% in Q1 2022).
- One striking thing about small business owners over the past five years has been their steady optimism that things will improve in the future no matter what challenges the present throws at them. And this quarter is no different.
- Looking ahead to next year, 43% of small businesses intend to increase their staff—an increase of six percentage points from last quarter. Meanwhile, 43% anticipate they will invest more over the next year, and 66% expect revenues to increase, both on par with Q1 2022.
-Written by Kevin Sawyer
SearchPro Systems
2024