Editor's Note: The following is a snapshot of the findings from Intuit QuickBooks' "Small Business Insights Survey" (March 2022), which includes input from more than 2,000 small business owners and decision-makers across the US.1
Almost 99% of the small businesses surveyed in Intuit QuickBooks commissioned "Small Business Insights Survey" reported they were concerned about inflation, up from 97% in December, and 96% last September.
More than half of those surveyed had inflation concerns in the "very concerned" category.
Source: QuickBooks Blog (QuickBooks Commissioned Survey on Small Business Insights - March 2022)
When asked about their preference regarding Federal monetary policy in relationship to inflation, 37% felt an increase in federal interest rates was warranted, while 17% said a drop in the fed rate was appropriate.
By far, 46% felt the fed rate should remain unchanged.
The survey also showed that 50% cite both rising costs and the economy (in general) as the top two threats facing their small business. Surprisingly, only 39% cited supply chain problems as a threat (the net ranking being 8th place). Others included cash-flow (7th place) and cybersecurity threats (6th place).
Source: QuickBooks Blog (QuickBooks Small Business Insights Survey - March 2022)
Low(er) demand for product/services, lack of (available) funding, skills (skilled personnel) shortages, low-price (lower priced) competitors and employee retention (difficulty in retaining employees) rounded out (5th through last) the Top 10 threats.
While cash-flow was the fourth-highest concern at 29%, it clearly is being driven by inflationary pressures upon small businesses. More than 68% said they were having cash-flow problems, up significantly from the December survey results of 57%.
More than 20% are experiencing "major" cash-flow problems, compared to just 12% late last year (2021). As a result, many small businesses are either depleting their cash reserves, or turning to credit cards or personal savings to fund their cash-flow shortages.
Despite the pressures of rising costs, overall economic inflation and cash-flow crunches, fewer small businesses plan to raise prices. Just 43% said they plan to raise prices. That happens to be the smallest proportion reported in any of the "Small Business Insights Surveys" since QuickBooks first started publishing them in September 2021.
The price-hike measure is down from 63%, which was reported this past December.
Simultaneously, even with the impact of the economic pressures driving the outlook of these small businesses, half or more plan to grow their workforce over the next three months, increase pay for existing workers or provide other benefits to aid in employee retention.
Here are a few more of the survey findings:
- Entrepreneurial aspirations still high — More than one in five (22%) of consumers currently are considering starting a business. While not all may see these plans through, it is further evidence of the continued surge in new small business creation first reported by QuickBooks in December 2021.
- Digital small businesses expecting higher growth — Among omni-channel businesses (those with fully integrated online and offline sales) 79% predict growth over the next three months, compared to just 47% for brick and mortar. In addition, 91% say it will be important for people to find or buy from them online over the next 12 months.
- Cybersecurity issues remain top of mind — More than one in five (23%) cite cybersecurity as one of their biggest threats, with 42% having experienced a cybersecurity breach. The top three most common issues were: malware (18%), phishing (17%) and data breaches (16%).
- Hiring and retaining employees still a barrier — While almost half say hiring is getting harder, 38% cite retaining skilled workers as a challenge. In response to hiring challenges, 19% are increasing pay for new workers, down significantly from the December survey, where 44% said they were increasing pay.
- Despite challenges, positive outlook and opportunities abound — Despite looming challenges, small businesses remain hopeful, with 58% optimistic about the economy. And if the pandemic shows continued signs of improvement and life returns to normal this summer, 79% expect it to create a positive impact on their business. Many are anticipating a big bounce this summer, with almost two-thirds (65%) predicting their businesses will grow over the next three months.
“Small business owners are always known to be resilient, and despite the challenges facing so many of us today, it’s encouraging to see optimism is high as we approach summer,” says Alex Chriss, Executive VP and GM of Intuit’s Small Business and Self-Employed Group.
Insightful Accountant has only begun to summarize some of the interesting points from the Intuit QuickBooks "Small Business Insights Survey," which can be found at the Intuit QuickBooks Blog HERE.
Acknowledgements, Disclosures and Footnotes:
Portions of this feature, including graphical artwork contained therein, have been adapted from this Intuit QuickBooks Blog feature covering the Intuit QuickBooks Small Business Insights Survey for Marcy, 2022; adapted source materials within this feature by Insightful Accountant are furnished for educational purposes only.
As used herein, QuickBooks refers to a registered trademarks of Intuit Inc., a publicly-traded corporation headquartered in Mountain View, California.
Any other trade names used herein refer to products which may be registered or trademarked, or otherwise held by, their respective owners; they are referenced for informational and educational purposes only.
This is an editorial feature, not sponsored content. None of the vendors within this article have paid Insightful Accountant or the author any form of remuneration to be included within this feature. The article is provided solely for informational and educational purposes.
The publication of this article, nor inclusion of this product within the related series, does not represent any endorsement by either the author or Insightful Accountant.
1 - Methodology: Small Business Insights Survey, March 2022 : QuickBooks commissioned Qualtrics to survey 2,031 small business owners and decision-makers ages 18+ throughout the U.S. in March 2022. Respondents’ businesses have up to 100 employees and more than $5,000 in annual revenue. Roughly one in four (29%) are brick-and-mortar businesses. The remainder describe themselves as omni-channel, multi-channel, or primarily online businesses. Almost a third (31%) are product-based businesses, more than two in five (44%) are service-based, and the remainder sell a mix of products and services. One in two (50%) are located in urban areas while the remainder are in rural or suburban locations. Percentages have been rounded to the nearest decimal place. Respondents received remuneration.
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