75% of Small Business Owners Are Concerned About the Pandemic's Impact on Their Business

75% of Small Business Owners Are Concerned About the Pandemic's Impact on Their Business

Black-owned small businesses face additional pressures
Concerned black business owner

Small business owners in the United States are raising concerns about the road to recovery in the wake of the COVID-19 pandemic, as they encounter challenges with rising inflation, limited cash reserves and hiring and retaining employees.

In the new 10,000 Small Business Voices report, investment bank Goldman Sachs revealed that just over a third of small business owners (38%) believe that the country is moving in the right direction — a 29% decline from June. Three-quarters of respondents also relayed concerns about how rising coronavirus cases are impacting their businesses.

Workforce shortage remains an ongoing challenge

In addition to managing the reintroduction of pandemic-era restrictions in the workplace, small businesses are seeing the crisis impact the entire organization.

Amid a national labor shortage, the report showed that small business owners are struggling to find and retain workers. Almost three-fourths of business owners (73%) have openings for full-time and part-time roles, but 87% of those respondents report difficulties in finding qualified candidates for those positions. Additionally:

  • 49% say they or their employees have faced mental health-related issues due to the pandemic, but only 19% say they can afford to provide employees with sufficient mental health resources
  • 44% say a return for kids to remote learning would make it difficult to retain employees
  • 80% say difficulty in hiring is impacting their bottom line
  • 64% say their workforce challenges have worsened since pre-pandemic

Still, these aren't the only challenges facing small business owners. Over 8 in 10 respondents expressed concerns about inflation (86%), due in part to increases in their operating costs (84%). Another 74% said that the financial health of their business has been negatively impacted by inflation as well.

Black-owned businesses face more pressures than their peers

Findings from the 10,000 Small Business Voices report also indicate that the pandemic has hit Black-owned small businesses harder than their peers.

For instance, 51% of Black-owned small businesses report having less than three months of cash reserves set aside in case of an emergency or another pandemic-related shutdown, compared to 44% of all small business owner respondents. Only 2 in 10 Black small business owners are very confident they would be able to access capital if needed, compared to the 31% of all small business owners who said the same.

Perhaps this is why 54% of Black-owned small businesses predict they will need to take out a business loan or line of credit this fall or winter, versus 29% of non-Black small business owners who are in a similar predicament.

The dire needs of small businesses during this time explains why nearly all respondents:

  • Say it's important for the current administration to prioritize policies that level the playing field for small businesses (92%)
  • Support the federal government creating a long-term, low-interest loan guarantee program to help small businesses rebuild their balance sheets (91%)
  • Say state and local governments should prioritize providing small businesses with access to capital when deploying their federal COVID-19 relief funds (96%)
  • Support the federal government providing additional financial assistance to small businesses (88%)

Methodology: On behalf of Goldman Sachs, Babson College and David Binder Research conducted a survey of 1,145 10,000 Small Business Voices participants between Aug. 30-Sep. 1, 2021. The survey gathered data from small business owners in 48 states.