Small business owners are still struggling two years after the COVID-19 pandemic began. But, according to a recent survey by the MassINC Polling Group, many issues are keeping America’s local small business owners, with 500 or fewer employees, up at night. Right now, small businesses are sounding the alarm on inflation, supply chain problems, and employee shortages.
Small businesses are making less money than pre-pandemic
NPR reports that the group “contacted 3,243 businesses in Massachusetts with 500 or fewer employees from June to August. Just over half of the businesses — 53% — reported taking in less revenue than they were pre-pandemic.” According to respondents, about a quarter of businesses have revenues down by up to 25%. About a fifth of companies report losses down 25% to 49%. Over one in ten firms report losses of 50% or more. Steve Koczola, President of MassINC Polling Group, said, “Many small businesses are still feeling COVID’s impact, with 53% reporting that they are not yet back to pre-COVID level revenues.”
Inflation remains the top concern for local small businesses
According to MassINC’s survey, 74% of small business owners said their biggest concern is rising costs due to inflation. In addition, Axios reports, “61% said wages keeping up with inflation was a major concern.” As a result, many local small businesses still feel the impact of the pandemic due to inflation and labor costs.
Local small businesses report employee shortages and hiring challenges
Most respondents report “finding qualified and reliable employees difficult” and “difficulty hiring enough employees.” As a result, hiring challenges is a significant concern for small businesses.
The smallest businesses are struggling the most
The smallest companies are less likely to report good business conditions. Most respondents with revenues under $1 million report “bad” or “moderate” economic conditions. With small businesses making less than $25,000 in revenues, about a quarter report “bad” conditions. Larger companies are more likely to say current economic conditions are good.
Local small business owners of color reported concerns about access to funding
Business conditions are most challenging for people of color. For example, MassLive.com reports, “Accessing capital was a “major concern” for Black (85%), Latino (88%), and Asian/Pacific American or Asian/Pacific Islander-owned businesses (77%) than for white-owned businesses (55%).”
Commonwealth Magazine found that people of color “had to wait a long time for credit decisions and more often get rejected for loans or receive less than what they applied for.” Capital access is a challenge for businesses owned by people of color.
It’s the economy, stupid
The number one concern of small business owners is inflation. Last week, the Federal Reserve raised interest rates to address rising inflation costs. The hike made it more expensive for small businesses to borrow money. Politicians claim they will solve the problems affecting small businesses – but is it real solutions or hype?
