Inflation is hitting small businesses hard right now—data from MetLife and the U.S. Chamber of Commerce found that 85% of small-business owners surveyed expressed concern about inflation. And 1 in 3 listed inflation as their top business concern.
In its latest “State of Small Business” quarterly report, business payment solutions company Veem surveyed more than 800 US small businesses on how high inflation affects their businesses.
The bad news: More than half of those surveyed don’t see inflation ending by year-end.
According to Veem’s “State of Small Business: Grappling with Inflation Pressures” quarterly report, of the 77.6% of small business owners surveyed who said they experienced inflation pressure, 32.3% said they experience it “all of the time”, while 45.3% said they experience it “some of the time.” The remaining 22.4% said that inflation neither applies to them nor that they’ve experienced it.
HIGHER COSTS
According to a Business.org survey, 92% of small-business owners surveyed have dealt with rising costs since the beginning of the pandemic.
The supplies and services you need to run your business are more expensive, and 26% have seen their costs rise by 20%.
To cope with inflation, 67% of small businesses have raised prices. Another four in ten (41%) report having decreased staff or taken out a loan in the past year (39%) in response to growing inflation pressures.
“Having survived the pandemic, now small business owners are being hit with surging inflation. It’s limiting their purchasing power and forcing small businesses to raise their own prices and absorb higher costs within already thin margins,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce.
“We need policymakers to pursue policies that will reduce inflationary pressures, including addressing the worker shortage crisis, expanding trade, and reducing tariffs.”
Inflation, Supply Chain and Labor Impact Operations
Most entrepreneurs say they’ve raised prices to sustain their business due to the impact of inflation and supply chain disruptions:
• Nearly nine out of 10 (88%) business owners are feeling the impact of inflation, leading them to: raise prices (68%); reevaluate cash flow and spending (34%); lose sales (31%)
• Three-quarters (76%) of business owners reported supply chain issues are impacting their business operations, causing them to: raise prices (58%); face difficulties sourcing products and supplies (49%); delay delivery of goods and services (43%)
• Owners are also experiencing labor shortages, with 41% reporting impacts to their business, including the need for them to work more hours and difficulty filling open positions.
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