According to a recent survey by Next Insurance, small businesses are feeling stressed and frustrated by the state of the economy and inflation.
Only 29 percent of respondents said they felt optimistic about an economic recovery in the next year, according to the survey of 1,000 small businesses across the U.S., with 35 percent admitting they have considered closing their business.
Following two years of being hamstrung by pandemic restrictions, small business owners said they are working more hours and about a third of respondents said they are performing duties usually handled by someone else. Thirty percent said employee turnover is high, with 28 percent reporting they’ve been “ghosted” by employees even though the survey revealed these businesses are paying about $24 per hour—about $2 more than two years ago. Just 8 percent of small businesses said they pay less than $10 per hour.
Meanwhile, 91 percent of respondents said they have had to raise prices due to supply-chain issues and inflation, according to Next Insurance, which began as a managing general agency in 2016 and became a carrier in 2018, targeting small and medium businesses with an online platform that leverages artificial intelligence and machine learning.
Nearly 40 percent said the increased cost of materials has significantly impacted them in the last six months. Eight out of 10 small businesses said they have been impacted by shipping delays and that shipping costs have skyrocketed.
“This substantial inflation is rapidly becoming a crisis for U.S. small businesses, which operate on low-profit margins and have less flexibility than larger companies,” said Suzanne DuFore, director of research at Next Insurance. “Small businesses are often the canary in the coalmine for our economy—if they’re feeling the intense stress and pressure from these major societal trends that show no signs of slowing down, it’s critical for us as consumers and leaders in financial services to be ready to help them out in any way we can.”