NEW YORK, NY – Small business owners across the United States are sounding the alarm about the direction the country is heading and are struggling to manage inflationary pressures, navigate labor shortages, and confront struggles of mental health, according to a new survey released today by Goldman Sachs. 10,000 small business voices. For small black-owned businesses, the challenges are even steeper. The data comes during the National Small Business Week, and after it was revealed last week that small businesses have few cash reserves and are concerned about access to capital.
Only 38% of those surveyed in the new national survey believe the country is moving in the right direction, representing a 29% decrease from June. Seventy-four percent of small business owners expressed concern about the impact of rising COVID-19 infection rates on their businesses.
Inflationary pressures continue to shake business operations. Eighty-six percent said they were concerned about inflation, and 84% said they saw an increase in their operating costs. In a sign that inflation may still be rising, 81% of those surveyed said inflationary pressures have increased since June and 74% said their company’s financial health has been negatively affected by inflation.
“Just a few weeks ago, small business owners hoped that a return to normalcy would help fuel our recovery, boost sales, increase labor market share, and ease the stress and mental health pressures we face during the pandemic. ”Said Jessica Johnson-Cope, president of Goldman Sachs 10,000 Small Business Voices National Leadership Council and owner of the Johnson Security Bureau in The Bronx, NY. “This data clearly shows that we are on the wrong track with the current increase in COVID-19 cases, making it difficult for small businesses already struggling with inflationary pressures to hire and fulfill critical roles and access care resources. child and mental health that will put them on the road to recovery. “
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Across the country, small business owners are working to overcome the challenges associated with hiring, mental health, and child care as COVID-19 cases continue to rise..
- Seventy-three percent of small business owners are hiring full-time or part-time employees, but 87% of those hiring find it difficult to recruit qualified candidates for open positions;
- Eighty percent say that hiring difficulty is affecting their results;
- Forty-nine percent say they or their employees have faced mental health-related problems as a result of COVID-19, and only 19% say they can afford to provide their employees with sufficient mental health resources;
- Forty-four percent say that a return of children to remote learning would make it difficult for employees to retain; and
- Sixty-four percent say their workforce challenges have worsened since before COVID-19.
An initial data set released It alarmingly revealed last week that 44% of small businesses have less than three months of cash reserves in the event of an emergency or other closure. Only 31% said they were very sure of being able to access the capital if they needed it.
Black-owned small businesses continue to face more treacherous recovery challenges compared to their peers. Only 20% of black-owned small businesses are confident that they could access capital if needed, a mark that is 11% below its peers. Fifty-one percent of black-owned businesses have less than three months of cash reserves in the event of an emergency or other COVID shutdown, 7% higher than their peers. Fifty-four percent of black-owned small businesses expect to have to obtain a loan or line of credit for their business in the fall or winter, while only 29% of non-black business owners share the same expected need .
Small black-owned businesses have also taken longer to recover to pre-pandemic employment levels. Before the pandemic, the average number of employees in the general universe was 11, while the average number of employees is 10 today throughout the universe. However, among small black-owned businesses, the median number of employees before the pandemic was nine, while the median number of employees in black-owned businesses today is six.
“Small businesses used their entrepreneurial wits to stay afloat for the past 18 months, but they are approaching a breaking point,” said Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices. “With dangerously low cash reserves for many small businesses and operational challenges seemingly around the corner, additional relief for small businesses must be a priority for legislators at the federal, state and local levels.”
Ninety-two percent of small business owners say it is important for the Biden Administration to prioritize policies that level the playing field for small businesses. Two potential relief efforts garnered significant support from respondents. Ninety-six percent of small business owners said state and local governments should prioritize federal COVID-19 relief funds to give small businesses access to capital. Eighty-three percent support President Joe Biden’s July 9th.th Executive order directing the federal government to promote greater competition in acquisitions and increase opportunities for small businesses.
The data is the result of a survey of 1,145 Goldman Sachs 10,000 small businesses Participants conducted by Babson College and David Binder Research from August 30 to September 1. The survey included small business owners from 48 states, 55% of whom were women. To learn more about the survey and its results, visit gs.com/covid-slowing-the-road-to-recovery.
ABOUT 10,000 VOICES FROM SMALL BUSINESSES
Goldman Sachs 10,000 Small Businesses Voices is an initiative for program participants to organize and advocate for the policies that matter to them. It is based on the 10,000 small businesses of Goldman Sachs, which over the last decade has provided access to education, capital and support services to more than 10,000 small business owners in all 50 states, Puerto Rico and Washington DC Learn more at www.gs.com/10ksb-voices.