Goldman Sachs has released new survey data that quantifies the challenges facing the small business community more than two years since the start of the pandemic. The new ‘Summit Survey’ finds an overwhelming majority of small business owners still have deep concerns about the trajectory of the economy – with 93% worried about the United States experiencing a recession within the next year and 89% reporting broader economic trends, including inflation, supply chain, and workforce challenges are still taking a toll.
The latest survey from Goldman Sachs 10,000 Small Businesses Voices will inform conversations at next week’s 10,000 Small Businesses Summit in Washington, D.C., where more than 2,500 small business owners will meet with over 400 government officials to advocate for solutions to the challenges they face, including access to capital, workforce and competitiveness, childcare and government contracting. They are calling on Congress to do something it hasn’t done in over twenty years: reauthorize the Small Business Administration to meet the needs of today’s small businesses.
“Entrepreneurs everywhere are facing a bumpy economic road ahead even as they have overcome the obstacles of the last few years,” said David Solomon, chairman and CEO of Goldman Sachs. “So it’s important that we bring together leaders from the private and public sector who can work together to support the source of economic vitality in America: our small businesses.”
“Over the past two-and-a-half years, small business owners have faced a once-in-a-century pandemic, once-in-a-generation inflation, unprecedented supply chain disruptions, and historic challenges finding qualified employees,” said Jessica Johnson-Cope, President of Johnson Security Bureau in The Bronx, NY and Goldman Sachs 10,000 Small Businesses Voices National Leadership Council Chair. “Washington has helped us through the worst of it, but it’s clear that more needs to be done. That’s why we look forward to discussing potential bipartisan solutions with our members of Congress next week during Goldman Sachs 10,000 Small Businesses Summit. America’s small businesses are the economic engines of most of our towns and communities. We’ve been through a lot these past few years, but with support from our elected leaders in Washington, we know we can emerge stronger than ever before.”
According to the survey, difficulty hiring and retaining workers remains the most significant problem facing small businesses, with 84% saying that hiring challenges have gotten worse or stayed the same over the past three months. Of those that have had difficulty hiring, a staggering 97% report that it has impacted their bottom line. Of small business owners hiring, 55% say that, on average, it takes more than two months to fill an open position with a qualified employee. And when asked the top reasons for hiring challenges, 78% cited competition with larger employers on pay and benefits.
Record inflation and ongoing supply chain challenges continue to have an outsized impact on small businesses as well. Ninety-seven percent of small business owners today say that inflationary pressures on their business have increased or stayed the same compared to three months ago. Sixty-five percent have had to increase the prices of their goods or services to offset the negative impact of broader economic trends and 38% have seen a decline in customer demand as a result of inflationary price increases. Making matters worse, 80% say that higher gas prices are negatively impacting their business and 78% say supply chain issues have gotten worse or stayed the same compared to three months ago.
Despite these broader trends, however, nearly two-thirds (65%) of small business owners remain optimistic about the financial trajectory of their own business in 2022. Despite the unprecedented challenges of the past few years, small business owners – especially those who have taken part in Goldman Sachs 10,000 Small Businesses – remain resilient, overcoming obstacles and finding innovative ways to grow their companies, create jobs and strengthen their communities.
Additionally, as thousands of Goldman Sachs 10,000 Small Businesses alumni head to Washington, D.C. next week for the 2022 Summit, the survey finds near-universal support for lawmakers to take further action on the challenges they face:
- 89% of small business owners support policymakers taking action to help address small business workforce and competitiveness challenges;
- 89% support policymakers helping small businesses deal with challenges related to inflation;
- 88% support policymakers helping small businesses deal with supply chain challenges; and
- 88% say it is important for Congress to prioritize reauthorizing the Small Business Administration, which has not happened in over twenty years.
“Small businesses are the backbone of our communities and the lifeblood of our economy,” added Goldman Sachs 10,000 Small Businesses Voices National Director Joe Wall. “They’re not looking for a handout; they just want a hand up. The Goldman Sachs 10,000 Small Businesses Summit will be a historic opportunity for America’s small businesses to raise their concerns at the highest levels of our government. We’re looking forward to hosting this historic event and doing what we can to continue to lift up the small businesses that drive our economy forward.”
This data is based on a survey of 1,533 Goldman Sachs 10,000 Small Businesses participants conducted by Babson College and David Binder Research from June 20-23, 2022. The survey included small business owners from 48 U.S. states and two U.S. territories.