By Nathalie Voit
High prices remain a top concern for small business owners, according to a Bank of America report released on May 3.
80% of small business owners cited inflation as a top economic concern, followed by commodities prices (75%) and the U.S. political environment (68%). 88% of employers noted inflation was currently impacting their business. As a result, 68% plan to raise prices to cover their increased costs.
Supply-chain issues pose operational challenges for more than 3 in 4 small business owners (76%). Employers mentioned raising prices (58%), having difficulty sourcing products/supplies (49%), delaying delivery of goods and services (43%), losing customers (23%), and decreasing their physical inventory (21%) to cope with supply-chain woes.
Almost 8 in 10 owners said their business was negatively impacted by the COVID-19 pandemic (79%). Owners reported the biggest impacts on sales (63%), products and inventory (43%), business owner wellbeing (37%), and staffing (26%).
Another 41% of owners cited labor shortages as a significant source of stress. Many reported working longer hours (57%), having difficulty filling job vacancies (35%), reducing the goods and services they offer (29%), raising wages to attract talent (29%), and losing customers due to staffing issues (21%).
More than 1 in 4 business owners (26%) plan to hire over the next 12 months, an increase of 5% relative to the same period last year. During the COVID-19 pandemic, just 13% of owners were looking to fill open positions.
62% of business owners say they have completely or partially recovered from the pandemic. Of those who said the public health crisis impacted their business, 48% mentioned increased consumer spending as a factor that will help or has helped their business recover.
The Bank of America 2022 Small Business Owner Report is yet the latest survey to sound off on inflation. Just last week, the National Federation of Independent Businesses (NFIB) released its own survey about the impacts of inflation on small businesses.
The majority of those surveyed (62%) by NFIB said inflation posed a substantial impact on their business. To compensate for the price pressures, about 7 in 10 small business owners (68%) say they plan to raise prices in the next three months. Eighty-six percent have already done so, according to the survey.