It’s obvious that inflation, which is the highest it’s been in the U.S. for decades, is impacting most of our lives—as consumers and as business owners.
Indeed, a new report from SCORE, the Megaphone of Mainstreet: Inflation & the Economy, shows 30.5% of business owners say they’re “extremely worried about inflation” and rank it as a top business concern. And another 62.5% report being generally concerned about inflation and are keeping an eye on rising prices.
Other key findings from the report:
Attracting customers remains the top challenge for small business owners but cash flow, inflation, and supply chain disruptions are growing concerns.
- 4% of business owners report feeling ambivalent about the economy—either somewhat positive, somewhat negative, or neutral.
- 7% experienced declining profits over the past six months. Only 15.5% reported profits were higher than expected.
- Profits are down because sales have decreased for 58.6% of small businesses, while expenses have risen for 59.5%, compared to six months ago.
- 7% of business owners are being charged more than they were six months ago by their vendors and suppliers. And 53.5% now pay more for utilities, including gas.
- The rising costs have led to cash flow problems for 35.9% of the business owners surveyed.
To improve profitability, small business owners are
- Seeking more profitable clients
- Adjusting their product mix
- Improving technology
- 8% are raising prices
Regarding the price increases, all but 7.8% of those surveyed raised prices by 5%-20%, with an average increase of 11%.