PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

More Survey News: Major Small Business Challenges Persist

By at 18 July, 2022, 6:08 pm

by Raymond J. Keating –

Goldman Sachs just recently released its latest survey of small businesses, and its chock full of insights on the challenges faced by the entrepreneurial sector of our economy.

Economic Concerns vs Their Own Business Conditions

First, the dichotomy between the views of small business owners regarding the economy versus their own firms persists. Specifically, 93 percent of small business owners surveyed worried about a U.S. recession in the coming 12 months, 78 percent said that the economy has gotten worse over the past three months, and 61 percent agreed that the U.S. is on the wrong track. However, at the same time, 65 percent were positive about the financial projection of their own business.

But that last point doesn’t mean that small businesses have been unaffected by recent challenges. For example, it was found that 89 percent of small business owners have seen their businesses negatively affected by matters like inflation, supply chain issues and workforce problems.

Top Areas of Concern

It’s rather amazing that more of the small business owners surveyed cited “difficulty finding and retaining qualified employees” as the most significant problem they face – 45 percent – versus those identifying inflation – 32 percent – as the top challenge. In fact, 84 percent agreed that hiring challenges have gotten worse or stayed the same over the past three months.

Of course, inflation still remains a big issue, as 75 percent of small business owners have seen the financial well-being of their business negatively impacted by inflation over the past six months.

And regarding supply-chain problems, 67 percent of small business owners said their bottom line was negatively impacted by such challenges. That was a slight improvement from the April survey (73 percent).

These findings largely line up with SBE Council’s most recent “Small Business Policy and the Economy” survey (see some key points here).

The Goldman survey also noted that nearly 90 percent of small business owners support policy actions directed at workforce challenges and inflation. But the specifics were left out. And specifics matter a great deal. After all, elected officials can claim that they’re doing something about a problem, and their actions just might be making matters worse.

That’s largely the case with the Biden administration and Congress right now. The economy clearly needs a pro-growth agenda of substantive and permanent tax and regulatory relief, advancing free trade, and reining in government spending, but we’re getting the exact opposite.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.

 

News and Media Releases