Over 60 percent of American small-scale employers are worried about inflation threatening their businesses with the highest prices since 1982, according to a recent survey by Clarify Capital.
In a poll of more than 500 small-business owners, 61 percent said they were worried about staying afloat in the current economic climate.
Sixty-six percent of poll respondents reported that inflation had worsened since the start of 2022. Sixty-five percent said inflation was their primary concern, with 76 percent reporting that they’ve had to raise their prices in the past year.
Many are concerned about the ability to stay open after having to pay thousands of extra dollars just to pay for basic goods and utilities.
Small businesses are the most vulnerable to shocks in prices and in the marketplace, as the current economic crisis hits those with fewer resources more than the bigger brand retailers with massive logistical networks.
Seventy-one percent of business owners claimed inflation and supply chain logjams were responsible for many of their recent problems.
Twenty-four percent of onsite retailers said they were concerned about running out of business in 2022, compared to 16 percent of hybrid business owners and 15 percent of remote business owners.
Supply chain issues in 2021 caused an average cost increase of $10,628 to business owners for goods and supplies, and an extra $6,562 due to inflation.
Respondents said that they were forced to raise their prices by 27 percent in order to stay ahead of inflation.
Fifty-one percent of small retailers have claimed that the price increases have lost them customers, as more households cut down on expenditures. This includes 62 percent of on-site businesses and 55 percent of those on-site and in-person.
Meanwhile, 26 percent of those polled say that the nationwide labor shortages are hurting their survival.
Respondents said that in 2021, they had to pay, on average, an extra $14,275 in incentives to keep employees from leaving, as labor shortages cost the average American small business an extra $12,934 in expenses.
On-site small business owners told the survey that they paid out over $20,000 in incentives to keep workers from moving on.
At least 37 percent of in-person store owners said they were concerned about having to raise wages to keep their workers happy in order to stay competitive, compared to 8 percent of remote companies.
Small business owners on average lost 16 percent of their workforce to illness or better opportunities in 2021.
On-site businesses in general lost about 19 percent of their workforce, retaining 81 percent of their staff.
However, remote businesses appear to have fared best and were able to keep most of their employees, with 87 percent remaining with their companies through the pandemic.