Small business owners are being pushed to the brink with an unprecedented set of challenges hurting their bottom line, according to new national survey data released by Goldman Sachs 10,000 Small Businesses Voices.
Seventy-nine percent of respondents are concerned about the ongoing pandemic and the Omicron variant, with 71 percent reporting that the rise in COVID-19 cases brought on by the Omicron variant has adversely impacted their revenue. Thirty-seven percent said their business had been forced to temporarily close or scale back operations due to the recent rise in COVID-19 cases.
Labor shortages were cited as the most significant challenge facing small business owners, with 87 percent of those hiring finding it difficult to recruit qualified candidates for open positions. Hiring and retaining workers is also having a worsening impact on revenue, as a staggering 97 percent of small businesses hiring say labor shortages are impacting their bottom line, reflecting a 17 percent increase from September 2021.
Sixty-eight percent of respondents report concerns regarding ongoing supply chain constraints, with 69 percent saying the issue has negatively impacted their business revenue. In a troubling response, 66 percent of impacted businesses say it is a problem that suppliers are favoring large businesses over small companies due to the volume of orders. There does not appear to be an end in sight as only 13 percent of impacted businesses expect supply chain issues to subside in the next six months.
A startling 84 percent of small business owners say inflationary pressures have worsened since September 2021 and more than three quarters (76 percent) shared that their business’s financial health has been hurt by inflation.
Reflecting a shift in confidence, only 29 percent of small business owners think the United States is moving in the right direction, a 38 percent slide since June 2021. Further, just 24 percent describe the American economy as “excellent” or “good.” Only eight percent said the federal government has done enough to solve for difficulties in hiring, and ten percent said the same for inflation, while nine percent believe the federal government has done enough to fix supply chain challenges.
“Approaching the second anniversary of the onset of the pandemic, it is abundantly clear that small business owners across the country are facing more challenges than ever and simply cannot catch a break,” said Jessica Johnson-Cope, Chair of Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and President of Johnson Security Bureau in The Bronx, NY. “The relentless pressures to pivot brought by this never-ending pandemic, coupled with the difficult labor market, inflation and supply chain constraints are all pushing small businesses to the brink.”
There is overwhelming support (82 percent) for the federal government to provide additional emergency financial assistance for small businesses. Eighty-six percent of small business owners support Congress reauthorizing the COVID-Economic Injury Disaster Loan (EIDL) program. The COVID EIDL program expired at the end of 2021.
While more than a third (36 percent) said 2021 was more difficult than 2020, 73 percent said they are optimistic about the financial trajectory of their business in 2022.
“This new data clearly shows that the economic headwinds created by the pandemic are stronger than ever – and keep hitting Main Street hardest. Congress needs to seriously consider additional policies and programs, like reauthorizing the COVID EIDL program, to aid in the recovery of small businesses,” said Joe Wall, National Director of Goldman Sachs 10,000 Small Businesses Voices.
The data is a result of a survey of 1,466 Goldman Sachs 10,000 Small Businesses participants by Babson College and David Binder Research from January 10-13, 2022. The survey included small businesses from 47 states, 58% of whom were women.