Inflation is hurting small businesses’ ability to hire and retain workers. As such, businesses are forced to raise prices on consumers. Overall, inflationary pressures on businesses have worsened since January.
Small Business Owners Say Inflation Keeps Getting Worse, As Energy Prices Are Up
These were the findings of a new survey by Goldman Sachs 10,000 Small Businesses Voices, an initiative designed to help small business owners in the United States advocate for policy changes that will help their businesses, their employees, and their communities.
The survey involved collecting responses from 1,107 Goldman Sachs 10,000 Small Business participants and was conducted by Babson College and David Binder Research from April 11 – 14, 2022.
Inflationary Pressure on Small Businesses has Worsened
The research found that 88% of small business respondents say inflationary pressure on their business have become worse since January this year.
Rising energy costs are also impacting small businesses, with 73% of respondents across all sectors saying escalating gas and electricity bills are having an impact on their business.
A large majority (91%) of small business owners say broader economic trends, including inflation, supply chain issues, and workforce challenges are having a negative impact on their business.
70% of those interviewed said they are worried about employees leaving their businesses, due to larger companies being able to offer higher pay and more generous benefits.
The survey provides valuable insight to small businesses on the challenges owners of small businesses from different sectors are facing. Showing the leading grievances and concerns that small businesses can help people running businesses in the US know they are not alone.
Taking Steps to Protect Small Businesses
They can also use the findings of the survey to take the necessary steps to help protect their business. One step might be implementing a caring and positive work culture to help prevent employees from moving to larger companies, which is a key concern among many small business owners.
Khari Parker, a member of Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and owner of Connie’s Chicken and Waffles in Baltimore, described the challenges small businesses currently face: “Small business owners are stuck between a rock and a hard place as inflation and an uneven economic recovery are impacting every part of our businesses with no end in sight.
“Small business owners need policymakers to understand that while most businesses have fully reopened since the pandemic, the road to a full recovery will be long – with new challenges around every corner.”
Leveling the Playing Field for Small Businesses
According to the Goldman Sachs’ survey, small businesses are calling on the federal government to promote competitiveness by creating programs and services that better reflect the needs of small businesses today.
88% of small business owners say small businesses are struggling compared to larger companies in their local communities.
86% believe the federal government should do more to level the playing field so small businesses are better equipped to compete with larger firms. While 93% of those interveiewed for the study believe federal government should do more to tailor programs and services to better reflect the realities and needs of small businesses.