Majority for small businesses y Start small, think big posted a new one poll Thursday, Oct. 13, revealing that 64% of small businesses cited access to capital as a barrier they encountered in making changes that would keep their businesses running.
Small businesses are doing what they can to get back to pre-pandemic levels. Even as inflation rose and most small business owners (89%) reported feeling the pressures of this inflation, they persevered. However, more than a third of respondents reported that their trading conditions have slightly improved compared to a year ago.
Federal relief programs such as the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) have largely supported the road to recovery for this community.
The survey found that 46% of respondents received a PPP loan and 39% received EIDL loans, while other business owners received emergency funds through state or local grants and other non-government grants.
Despite the availability of these programs, a quarter of small business owners said they had not raised capital since the start of the pandemic, citing various reasons. Additionally, Latino and Hispanic-owned companies were among the 41 percent of small businesses that were more likely to respond that they didn’t qualify for funding programs than 25 percent of their white counterparts.
“As a minority entrepreneur, I am disappointed to learn from this survey that minority-owned companies were more likely to believe they were not eligible for economic aid programs than their white counterparts,” said Talibah Bayles, founder. from Access granted, Inc. in Birmingham, Alabama.
“As a longtime small business advocate, my mission is to bridge the financial education gap in small businesses. This data serves as a wake-up call for partners, leaders, and small business owners. We must go to the root of the problems affecting those with fewer resources and those with low incomes, and find solutions and provide services to ensure equal access to capital ”.
Inflation and access to capital aren’t the only challenges small business owners have faced. 60% of respondents continue to experience disruptions in their supply chains. Additionally, 73% of Latin and minority businesses are struggling to access benefits such as healthcare, compared to their white counterparts (61%). Despite the obstacles, more than 6 in 10 small business owners are optimistic about their business prospects for the next six months.
The survey perpetuates this optimism because it reveals that even if it is small businesses historically they struggle to meet With their commercial lease and mortgage obligations, 47% of respondents who rent or own their business premises are up to date with payments.
The resilience of entrepreneurs was even more pronounced during the COVID-19 pandemic, when many of them had to adapt their business model to orient themselves in the new business environment. The acceleration and digital transformation during the pandemic gave entrepreneurs the opportunity to implement new ideas on digital platforms and expand their digital presence. The survey found that entrepreneurs used more digital tools during the pandemic to grow their business and offer their products and services. In particular, during the pandemic:
- Entrepreneurs increased website usage by 8%
- Entrepreneurs increased their digital advertising by 18%
- Entrepreneurs have increased their presence on social networks by 35%
As they continue to overcome challenges during a global financial crisis, smaller companies are also navigating a competitive job market and struggle to recruit and retain quality talent. The survey revealed that while nearly half of respondents are currently hiring or planning to hire in the next year, 68% of small business owners reported that it is difficult to find quality workers. Between moves like the “big layoff”, 64% of respondents said candidates are demanding higher salaries. Given the low profit margins of the past two years, which have been exacerbated by inflation risks, many small businesses simply cannot afford to hire new employees.
“Small businesses are resilient and innovative,” he said Xiomara Pena, vice president of strategic partnerships for the majority of small businesses. “They have responded to today’s challenges in various ways, including by embracing digital transformation and using limited resources to maintain their retail space. Yet our new survey reveals that despite their resilience, small business owners need more opportunities to grow their workforce. We encourage policymakers to enact laws that foster a stronger workforce and support a long-term sustainable recovery path. “
The survey reflects the views of 676 small business owners and managers of the Small Business Majority and Start Small Think Big networks between June 20 and August 21, 2022. The margin of error is +/- 3%. Less than a quarter (17%) of respondents are self-employed and the majority of respondents (70%) own businesses with 10 employees or fewer. The sample also includes a large share of companies with female participation (69%) and companies with minority participation (72%).
Black entrepreneurs were less likely to have annual revenues of more than $ 100,000 (23%) than their white counterparts (50%). African American respondents (63%) were more likely to report an annual income of less than $ 25,000 than respondents from other racial demographics. Additionally, African American entrepreneurs more consistently reported having fewer than 10 employees than other racial demographics. To read the full report, please visit: https://bit.ly/SSTB_SBM_Network_Survey
