The economy, inflation and pricing

Getting customers remains the top challenge, but cash flow, inflation and supply chain disruptions are growing concerns.
Most business owners are worried about inflation. More than 30 percent list inflation as a top concern, and another 62.5 percent generally are concerned as they keep an eye on rising prices.
Because of continued economic uncertainty, three out of four business owners report feeling ambivalent about the economy — either somewhat positive, somewhat negative or neutral.

Business impact and resolve

Many small-business owners (62.7 percent) have seen their profits decline over the past six months. Only 15.5 percent reported that profits were higher than expected.
Profits are declining because sales have fallen for 58.6 percent of small business owners surveyed, and expenses have risen for 59.5 percent, compared to six months ago.
Vendors and suppliers are charging 65.7 percent of business owners more than they were six months ago. More than half of business owners (53.5 percent) now pay more for utilities, including gas.
Rising costs cause cash-flow problems for one-third (36 percent) of small-business owners surveyed.
To improve profitability, some small-business owners are seeking more-profitable clients; some are adjusting their product mix or improving technology; and most are raising prices.
Fifty-five percent of business owners found it necessary to increase prices to match price increases in the market. All but 8 percent of those surveyed have raised prices by 5 percent to 20 percent, with an average increase of 11 percent.

These challenges have arisen just as many owners pivoted away from other problems caused by the pandemic. Hiring concerns, which ranked high in last fall's survey, have diminished, although they have not disappeared.

Instant Insights /

Just as small business hiring problems diminish, inflation rears its ugly head

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