Will more consumers start their own businesses to combat inflation?
April 12, 2022
by Candace J. Dixon
The latest QuickBooks Small Business Insights Report was released on April 12, 2022, providing insights about both the challenges and opportunities that small businesses are currently facing. The Small Business Insights survey by Intuit QuickBooks in March 2022 had input from over 2,000 business owners and decision-makers.
The top issue plaguing small businesses is inflation, followed by cybersecurity and employee recruiting and retention.
Inflation is a massive concern for virtually all small businesses; and cash flow problems are necessitating the use of cash reserves, personal funds, and credit cards to stay afloat.
Nearly a quarter of small businesses cite cybersecurity issues as another threat; with security breaches experienced including malware, phishing and data breaches being common.
About half of small businesses are having an increasingly difficult time hiring and retaining skilled employees. Increasing pay is not the only strategy that businesses are using to combat this; they also plan to increase bonuses and offer employee benefits including paid sick leave and vacation time and healthcare.
Despite challenges, just about half of small businesses are optimistic about the economy; less than half plan to raise their prices, and three quarters anticipating growth — more so digital businesses — as long as the pandemic improves and normalcy is restored over the summer. Also, a quarter of consumers are considering starting a business of their own.
Consumers are worried about inflation more than they’re worried about COVID-19, according to another Intuit survey done in March 2022 that polled 8,000 employed consumers. The second survey suggests that some small businesses could face more competition as more than one in five consumers are at least considering starting their own business to help their finances.
Will this come to pass? That remains to be seen being that the second survey also has the respondents saying that they will have to decrease spending. The first to thing to go, according to the survey, would be dining out in restaurants, followed by non-essential items; energy (gas and electricity use); vacation pans; and large purchases such as vehicles.
Still — and rather fitting for this Earth Month — interest in electric vehicles is piqued, as over half of those surveyed are finding EVs an attraction option with the cost of gas being so high.
Sources:
QuickBooks Small Business Insights Report Intuit Inc. — New Intuit QuickBooks Small Business Research: Inflation Concerns Persist, but Optimism Increases https://www.businesswire.com/news/home/20220412005239/en/