Small businesses appear to be in a holding pattern as sales growth continues to stagnate, and worries about the negative impact of inflation are top of mind, according to two separate reports.
In one research report from MetLife and the U.S. Chamber of Commerce, the Small Business Index for the most recent quarter dropped to 60 from the prior quarter’s score of 62.1. The drop was due to “worsening perceptions of the national economy,” the report’s authors noted. Still, the report found that “most small business owners continue to feel good about their own business health and cash flow.”
Related Articles
Regarding sales growth, the report found that those SMBs polled about future expectations said their sentiment was in line with the past two quarters. What’s holding them back? In a word, inflation.
You May Also Like
“More than half [54 percent] of small business owners continue to cite inflation as their top concern, the fifth consecutive quarter that inflation has topped the list of challenges,” the report stated. “In comparison, other issues like revenue, supply chain issues and rising interest rates remain second-tier concerns.”
When it comes to small business’ “perceived access to capital,” 49 percent of respondents said their current access to capital or loans was good, “which is slightly, but not significantly, lower than in second quarter 2022 (54 percent) and markedly lower than it was in second quarter 2017 (67 percent),” the report noted.
In a separate poll by Next Insurance, small businesses said inflation, supply chain issues and workforce shortages continue to be challenging. Of importance to Next Insurance itself, the survey revealed that 90 percent of business owners said they “aren’t completely confident they have enough insurance coverage for their small business,” while 96 percent of those polled “didn’t achieve a passing grade when quizzed about basic insurance knowledge.”
Next Insurance also said close to 30 percent of respondents don’t have any small business insurance at all.
When asked about the impact of inflation, 68 percent of respondents described it as “a top stressor for their business, as high prices continue to cut into their margins.” The report went on to note that 42 percent of those polled cited reduced customer spending as a primary concern. Meanwhile, 30 percent of those polled cited supply chain issues as a top concern, while 14 percent said it was workforce shortages.