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.