Brief • 5 min Read
- Rising costs and the economy are the top sources of sleepless nights for small business owners
- Despite concerns, small businesses demonstrate tepid confidence, with the majority planning to make investments in their companies this year
As the daughter of a small business owner – and having been involved in the family business in some capacity over the past 3 decades – I’ve seen firsthand the rollercoaster ride that entrepreneurs have been on over the past few years. Rising costs, supply chain disruptions, a revolving door of employees, and constantly changing customer demands – all while trying to keep their business afloat. Not an easy feat. Despite this, small businesses remain the heart of the American economy. To better understand the struggles and outlook of today’s small businesses, the Harris Poll used its new quick-turn B2B survey tool B2B On Demand to survey over 300 small business owners in December 2022. The data illuminates a mixed bag for the future.
The overwhelming majority of small business owners (89%) say they put everything they have into their business and an equal proportion agree that everything they’ve sacrificed for their business has been worth it. Like most small business owners, my father has put his blood, sweat, and tears into his small business, with no shortage of sacrifices made to keep the business up and running. In the past year alone, small business owners have weathered a perfect storm of a pandemic, inflation, supply chain disruptions, and a tight labor market. Still, as America’s small businesses – like my dad’s – continue to recalibrate post-pandemic, concerns continue to plague their recovery efforts. With inflation reaching a 40-year high last year, perhaps it isn’t surprising that for nearly half of small business owners, rising costs (49%) and the impact of the economy (47%) have been keeping them up at night. In fact, nearly half of small business owners (46%) say they would not start a new business in today’s economy.
Despite operating in an environment turmoiled by economic uncertainty and unrest, small businesses remain cautiously optimistic and are split on their outlook for 2023. Nearly half (47%) have a positive outlook and a similar proportion (51%) expect their revenue to increase over the next six months. On the other hand, 53% report a negative outlook, though only 24% of small business owners expect their revenue to decrease. Perhaps this is because economic related factors – inflation continuing to rise (63%), a recession (49%), and being able to maintain revenue/cash flow (42%) – top their list of concerns when they think about this year. In fact, more than 2 in 5 small business owners (41%) say they don’t know if they will be able to keep their business afloat if there is a recession this year.
Still, failure isn’t an option. Against a complex and fluid economic backdrop, the majority (68%) plan to make investments in their company this year, most commonly in marketing/advertising (37%), new products/service offerings (31%), and sales (29%), indicating a heavy focus on customer recruitment. Small business owners continue to push forward, focusing on new opportunities for their business. 2023 offers endless possibilities and small business owners – including my dad – are ready for what this new year will bring.
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