In June of 2021, small business owners anticipated that their revenue would be back to pre-COVID levels by the middle of 2022. Now, with inflation driving many businesses to the brink, those projections have been pushed back to mid-2023. CNBC and Survey Monkey’s joint online poll reported that 74 % of small business owners believe things won’t be getting better any time this quarter.
The rising cost of supplies is no different from what it was in Q4 2021 when omicron was at its worst, causing inflation to skyrocket. More than 47 % of businesses reported passing along increased supply costs to their consumers, and another 32 % reported that caving to inflation could be in their near future. Additionally, 55 % of small businesses didn’t see this nightmare ending any time soon and anticipated that inflation will be just as bad in six months.
America’s independent small businesses are feeling devastated and concerned, and now more than ever, their faith in the Federal Reserve’s ability to help control inflation is diminished, the poll reported. The Consumer Price Index reading is the highest it has been in 40 years, and the Small Business Confidence Index is at an all-time low of 44 out of 100. Ultimately, 78 % of small businesses report that their costs are higher than they were in 2019, and about one-third of those respondents have experienced price increases of more than 25 %. Because of these massive changes, consumers are getting the short end of the stick by paying more for local products, as just about 50 % of businesses are passing costs to their customers.
The one consoling factor, experts said, is that the small business sentiment is typically more reactive to the latest news rather than overarching, long-term forecasting. Large inputs such as gas and fuel costs or rising freight charges greatly influence the small business outlook, and when those input prices are low, the future feels more manageable. And while it may take a while, and opinions on the topic vary tremendously, 46 % of small business owners believed that their revenue will increase in the next 12 months, the survey showed.