BOSTON–A new analysis of small business owners’ views of their current state and what lies ahead can be summed up in two words, according to its authors: “economic backslide.”
The report, Alignable’s Small Business Road To Recovery Report for Q2 2023 shows that small business owners’ optimism regarding the economy is down, along with their revenues, margins, customer counts, and ability to pay rent.
The results are based on a survey of 4,235 randomly selected small business owners by Alignable during April. Historical responses from another 695,000+ small business owners were also included, the company said.
“2023 started with high hopes, but those have been suppressed under cumulative pressures of rising interest rates, still-high inflation, fears of recession, rent problems, and bank turmoil,” Alignable stated.
Survey Findings
Among the survey’s findings:
- 74% of those polled are concerned about rising interest rates and 27% said these rates have already hurt their businesses.
- Only 34% of small business owners are earning as much or more than they did prior to COVID, now three years after the initial impact. And that statistic has dropped four percentage points from 38% in January, the company said.
- 66% of U.S.-based SMB owners still aren’t making as much as they did prior to the pandemic.
- States with the lowest recovery rates include KY at just 14%, GA (22%), NY (25%), WA (25%), IL (28%), TX (30%), & CA (33%), among others.
- The worst recovery rates industry-wise belong to SMB owners in transportation (12%), events (13%), the arts (21%), gyms (22%), retail (23%), restaurants (24%), beauty salons (28%), & real estate (29%).
- While 53% remain more optimistic about 2023 than 2022 (down 3% from 56% in Jan.), pessimism has surged seven percentage points from 14% in Jan. to 21% now.
- Shrinking margins are having a big effect on their outlook: 75% say ongoing high inflation continues to damage their businesses & remains their No.1 worry.
- Ramping up revenue is the No. 2 concern: 48% say in April they earned half or less of the sales they generated monthly prior to COVID. That’s nine percentage points worse than it was in January at 37%, according to Alignable.
- 39% of SMB owners couldn’t pay their April rent in full, jumping nine percentage points from just 30% in January. And 53% say they’re paying more for rent today than they did six months ago.
The full report can be found here.
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