The Small Business Index on Inflation and How it Impacts Small Businesses 

The Small Business Index on Inflation and How it Impacts Small Businesses

Last Updated on: 23rd April 2024, 06:36 pm

According to the latest MetLife & U.S. Chamber of Commerce Small Business Index, small businesses’ worry about inflation has grown significantly in the last three months. The Index showed that in the third quarter of this year, 60 percent of small businesses said they were very or somewhat worried about inflation, up from 50 percent in the second quarter. 

While some business owners are finding ways to work around these difficulties, others are feeling the pressure more acutely. In addition, most small businesses think the current economic conditions are not good. This contrasted with a few months ago when most small businesses thought the economy was in good shape. However, the percentage of small businesses that feel this way has decreased slightly in the last quarter. 

This quarter’s score of 62.1 represents the most significant drop since the start of the pandemic, which has taken a toll on small businesses throughout the country. As a result, many small businesses have been forced to close their doors, and those that remain open are struggling to keep up with rising costs.

Compared to last quarter, small business owners feel less comfortable with their cash flow and have more negative expectations about revenue and staffing levels. Although two-thirds (66%) say they’re currently content with their cash flow situation, this marks a seven-percentage point drop from the previous quarter—the first significant decline in this measure since mid-2020. In addition, the percentage of small businesses telling us they expect to add staff and those predicting more revenues next year declined a little this quarter, but these shifts are minor.

Furthermore, those surveyed see the economy as more unpredictable than in years before and have more significant worries about the economy’s future. Three-fifths of respondents believe the economy fluctuates quicker now than it did previously. Eighty-eight percent of Americans are anxious about the U.S. economy tanking in the next twelve months – more than half of them very concerned.

The most common concerns of small businesses have been related to the cost of goods and services, health care, and taxes. The effects of the pandemic are still being felt by small businesses across the country. The MetLife & U.S. Chamber of Commerce Small Business Index provides a snapshot of how small businesses are feeling and what their concerns are.

As the government continues to grapple with the pandemic, it is essential to keep an eye on small businesses and see how they are faring. Governmental organizations and private entities alike are working to find solutions to this problem, but it remains to be seen whether they will be successful. In the meantime, small business owners must do everything they can to keep their businesses afloat.

The MetLife & U.S. Chamber of Commerce Small Business Index is a quarterly measure of the relative confidence of small business owners in the United States. The Index is compiled from a survey of 1,203 small business owners and managers nationwide. 

Small Business Index Statistical Highlights

The Pandemic Has Resulted In The Sharpest Drop In Index Numbers That We Have Seen Yet.

The Index, which measures the sentiment of small businesses in America, fell by seven percentage points from the previous quarter. This is the first significant decline in this measure since mid-2020. 

Inflation Is Still The Primary Concern.

Many small businesses (50%) say that inflation is their top challenge. This is a 31-point increase from last year. Inflation has been a growing concern for the past five quarters.

Many People Believe That The Worst Inflation Is Yet To Come.

71% of small businesses are expecting the adverse effects of inflation to continue or worsen in the near future.

The Current National Economy Concerns Small Businesses.

Since last quarter, the number of small businesses that believe that the U.S. economy is in poor health has increased by 10 percentage points to 59%.

A Growing Number Of People Report A Weak Local Economy.

Small businesses are reporting more poor health for their local economies (42%) than good health (31%) for the first time since early 2021.

Fewer People Are Comfortable With Their Cash Flow.

In the past quarter, cash flow comfort among small business owners decreased by seven percent to 66%, marking the first significant drop since April 2020.

Many People Are Anxious About a Possible Downturn.

Small business owners are overwhelmingly anxious about the economy in the next twelve months, with 88% worried and 54% very worried. 

While Secondary To Some Degree, Supply Chain, And Revenue Generation Are Nevertheless Significant Concerns.

Despite supply chain and revenue remaining in the top three concerns (26% and 22%, respectively), they take a backseat to inflation, which is still the leading worry at 50%.

The Hiring Plans Of The Smallest Businesses Have Decreased In Recent Months.

Three out of ten small businesses with fewer than five employees are planning to hire new staff next year. This decreased from the last quarter when nine out of ten small businesses were planning on hiring new staff.

How Can Simply Be Found Help Small Business Owners With These Concerns?

Small businesses need to prepare for inflation by finding ways to reduce costs. Difficult times await small business owners during inflation, but the end is not necessarily near. Your business will have to be quick on its feet and able to adapt in order to apply these new strategies successfully. You can help edge out any competition during this time by staying focused, having a clear plan, and executing it flawlessly.

Getting your local business found in local search is an essential aspect of running a profitable business. Those that tend to their marketing success in inflation, while those that do not fail. Simply Be Found shows you how to be successful in inflation by optimizing your profile with our step-by-step plan in just 5 minutes a day. We make sure that your business is being found on all devices, such as Siri, Cortana, Google, Bixby, and many more. If your business is listed on these, you’re taking advantage of a valuable opportunity to reach potential customers. 

You can generate reviews, respond to reviews and showcase your reviews to all your platforms to improve your rankings online and get found locally at the top of local voice searches.

Simply Be Found helps you get more market share by helping you make sure your address and operating hours are correct across search engines so potential consumers can find you online. We help you make sure that your business information is updated and consistent, as it will impact your local SEO (Search Engine Optimization). 

Start your 7-day trial with Simply Be Found today to get started on the path to success in inflation.

About the author:

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Dean Koehler

Dean Koehler stands as a testament to the entrepreneurial spirit, co-founding Simply Be Found and with over 30 years of entrepreneurial business experience. His journey is marked by both successes and failures, each contributing to his profound understanding of the business world. What truly sets Dean apart is his light-hearted and compassionate approach towards everyone he interacts with. His Roots: Dean’s lineage is rich with educators, embedding in him a deep appreciation for the power of storytelling and analogy in teaching. This background has honed his ability to simplify complex concepts, making them relatable and easy to grasp. Love for Reading and Audio Books: An avid reader and now an audio book junkie, Dean immerses himself in a variety of genres. This extensive reading not only fuels his expansive vocabulary but also enriches his perspectives, allowing him to connect with a diverse audience. Unique Communication Style: Dean’s conversations are often peppered with witty one-liners from classics like ‘The Wizard of Oz’ and ‘Monty Python.’ These references are not just humorous but also serve as effective tools in making his points more memorable. Creating passion for storytelling; his love for books and movies is an integral part of how he communicates. He skillfully weaves narratives into his teachings, making complex ideas more accessible and engaging, which he skillfully drove his now adult children to exasperation with his comments. Engineering Mindset: With a background in engineering, growing up with a science teacher, and his wife still teaching science, Dean naturally gravitates towards a methodical and analytical approach. He often draws parallels between science experiments and business strategies, demonstrating his knack for innovative problem-solving. If fact he and his wife spend several hours talking about real life situations for science experiments to parallel which creates story for her students. Passion for Storytelling: Dean’s love for books and movies is an integral part of how he communicates. He skillfully weaves narratives into his teachings, making complex ideas more accessible and engaging, which he skillfully drove his now adult children to exasperation with his comments. Dean’s unique blend of experiences and skills makes him an invaluable leader at Simply Be Found. His approachable demeanor and insightful perspectives have been key in guiding the company through the ever-changing landscape of online marketing and business growth. Although he does talk much about it, his academic and professional journey is a complex blend of hands-on experience and formal education, embodying the spirit of dedication and perseverance. His path reflects his commitment to continuous learning and adaptability in the face of evolving industry landscapes. Dean’s career began with a machinist apprenticeship program, a rare and valuable starting point in today’s world. This experience laid the groundwork for his practical understanding of the industry. He furthered his education with an associate degree as an electronics technician, a testament to his technical acumen. Dean didn’t stop there; he pursued a Bachelor of Science in Industrial Technology from Colorado State University, sharpening his skills in corporate leadership, process, and plant engineering roles. Next, earning a Master of Science Degree in Industrial Management from Northern Illinois University marked a significant milestone in his career. Notably, Dean accomplished this while juggling a full-time job and starting a family, showcasing his exceptional time management and dedication. Lastly and what he considers the most important is the School of Hard Knocks: Dean takes immense pride in his experiences outside the classroom. The ‘school of hard knocks’ has been instrumental in teaching him invaluable life skills. These experiences have given him a unique understanding of the challenges faced by small business entrepreneurs, aligning perfectly with his role at Simply Be Found. Dean’s journey, marked by a combination of formal education and real-world experiences, has equipped him with a diverse skill set and an empathetic understanding of the entrepreneurial journey. This makes him not just a leader but a relatable figure for those navigating the complex terrain of small business ownership and online marketing.

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