More than half of midsize businesses are operating at least at the same capacity as they were before the pandemic, with nearly one-third running at greater capacity.
The economy has taken small and midsize businesses on a rocky road over the past two years. However, a majority of businesses leaders believe that better days are ahead in coming year. Eighty-three percent of midsize and 71% of small businesses are optimistic about their own performance in 2022, up from 77% and 63% one year ago, according to JPMorgan Chase's 2022 Business Leaders Outlook Survey.
"Businesses have been key accelerators of the continued economic recovery through their resolve and ingenuity in finding new ways to deliver products and services to their customers," said Jim Glassman, head economist for JPMorgan Chase Commercial Banking. "They now have a stronger sense of how to remain competitive in the current economic landscape, which should allow them to build on last year's momentum."
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More than half of midsize businesses are operating at least at the same capacity as they were before the pandemic, with nearly one-third running at greater capacity than their pre-pandemic levels, indicating that some businesses have leaned into the disruption and continued to grow. Seventy percent also have seen profits return to or exceed pre-pandemic levels.
In response to today's challenges, small and midsize businesses have made several changes to their business models, including:
Supply chain workarounds. Nearly two-thirds of midsize businesses have used strategic stockpiling and more than half have added suppliers from new geographies. A significant number also have allocated more funds to cover increased costs related to moving products; changed materials or manufacturing processes; and replaced or stopped doing business with certain suppliers.
Employee incentives. Eighty-one percent of midsize businesses and 38% of small businesses have or plan to increase wages. Flexibility also is a key consideration for many business leaders, with 45% of midsize businesses having or planning to give employees flexibility on where they work and 40 percent of small businesses already offering or planning to offer employees more flexible hours. To retain staff, small businesses have boosted their employee benefits.
New consumer channels. Nearly one-quarter of small businesses have implemented more contactless payment options, and 22% have increased selling on social media platforms. In the year ahead, 19% expect to move to a nearly 100% e-commerce model, up from 12% one year ago.
"We're pleased to see that small business owners' confidence level is improving," said Ben Walter, CEO of Chase Business Banking. "Challenges remain, but our clients are resilient and we are proud to support them as they navigate supply shortages, adapt to shifting local safety requirements and find creative ways to hire employees in a tight labor market."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
