Small Businesses are the bedrock of the US Economy. A “small business” is typically defined as a business with 500 or fewer employees, most often less than 50 in total. A whopping 99% of US businesses are defined as small businesses. Small Business owners are visionary, creative, gritty and incredibly hard working. The Global Pandemic challenged Small Business owners, their businesses and their markets in ways never before experienced. While there were many casualties during this time there were also many success stories. There were no case studies from which to Roadmap your way through. However whether it be via Pivot, operational practice changes or just simple endurance US Small Businesses’ fought through to 2022 and entered the year with a confidence in strong customer demand. In fact, this demand brought the focus on hiring more employees to meet that demand as we entered 2022.
However, the largest concern in 2022 and beyond has fast become Inflation. The US Chamber of Commerce found that 88% of small business owners are concerned about the impact of inflation on their businesses. Additionally, 49% of small business owners say they are very concerned, compared to 44% a year ago. Historic inflation levels have several specific impacts on small businesses:
Operating Expenses increase
Paying and maintaining employees is more expensive
Supply chains are less reliable, but have more competition
Increased Shipping Costs for you and your customers
Covering these expenses often requires raising your prices, which could reduce overall demand for your products and services. This challenge brings the importance of employee retention, a truly positive business culture and superior customer service to the forefront.
Additionally, here are a few things to consider:
To improve Employee Retention consider creative perks such as flextime, hybrid work and special bonuses. 55% of small business owners expressed concern about filling empty roles
Raise your Marketing game so you stand out from the crowd via promotions, discounts and loyalty programs
Do a thorough review of your internal costs as well as those in your supply chain. Cut costs where you can, strive for better work and cash efficiencies
Invest in technology to automate functions requiring manual inputs or tracking. These should generate a return on investment and will free up time for employees to focus on other growth generating activities
While 55% of Small Business owners say they are working more hours each week than a year ago they remain optimistic. Much of that optimism comes from the strength of demand. That demand may be challenged by inflation itself in the near term as the value of the dollar declines along with our buyer power. However, small business owners and the tens of millions of people they employ are already showing resilience yet again. That desire to succeed, find new ways to operate, satisfy their customers and improve the lives of their employees will play an essential role in persevering again.