What’s weighing on the minds of small- and midsize-business owners? Topping the list of concerns are inflation, labor and the U.S. economy. 

That’s according to Verizon Business‘ third annual State of Small Business Survey, whose findings were released Sept. 8. 

Despite these burdens – which also include cybersecurity and the outlook for the 2022 holiday season – 56% of respondents believe they will be doing better a year from now than they are today. In the Northeast, that confidence level is slightly higher, at 57%. 

“While there has been a tightening of the belt by businesses of all sizes, they have also seen the benefit of continued innovation and technology investment to drive sales, employee engagement, and improved customer experience,” said Aparna Khurjekar, chief revenue officer, Business Markets and SaaS, Verizon Business, which has its operational headquarters in Basking Ridge. 

Key findings: 

• 44% of respondents are concerned about supply chain issues affecting holiday season sales and 35% are worried about economic hardships and inflation impacting sales. 
• More than 82% of respondents were worried about inflation, and more are concerned about their own financial security this year than they were in the past two years. However, 77% say their business is more prepared to handle economic challenges because of the lessons learned during COVID-19. 
• 62% of respondents said they are or are planning to raise their prices to combat inflation. 
• On a positive note, 80% of businesses surveyed haven’t laid off employees, and 87% haven’t reduced their employees’ wages. 
• Businesses would rather cut back on operational investments (39%) and employee events (59%) than on technology (29%). 
• 48% of technology additions were made to gain customers and 53% invested to better connect with existing ones. 
• A majority of respondents were concerned about cybersecurity, including viruses (55%), malware and ransomware (54%), sensitive data vulnerabilities (51%), password theft (51%), and spam and phishing (50%). 
• 48% of those surveyed began offering new products and services to adapt to changing consumer needs in the past year. 
• 59% say they’ve used social media marketing in the past year to increase customer engagement and online traffic, with most say they’re using Facebook and Instagram. 

Hardest hit:

Overall, the hospitality industry is concerned, according to the survey, which found that small businesses in food and beverage, restaurants and bars, and retail are more worried than other industries about bouncing back to pre-COVID levels now that consumers are watching their budgets.  

Top concerns among these groups were ensuring inventory levels and fulfillment schedules amid continued supply chain disruptions and cash flow disruptions. 

This year’s poll was conducted online by Morning Consult on behalf of Verizon between Aug. 12 – 19, among a national sample of 609 small to midsize business owners and decision makers. Results from the full survey have a margin of error of +/- 4 percentage points. 

More concerns

New Jersey restaurant owners’ economic pessimism grows, according to a recent New Jersey Restaurant and Hospitality Association. Click here to read those findings.