As inflation rates persistently plague small businesses, owners are increasingly concerned about the impact on their bottom lines. A new study conducted reveals that 91% of entrepreneurs are worried about price pressures, with 41% citing inflation as their primary concern. The survey also shows that less than a third of business owners are confident in the Federal Reserve‘s ability to control inflation, a figure that remains unchanged from the previous quarter.

Labour Shortages and Supply Chain Disruptions

In addition to inflation, labour shortages and supply chain disruptions are among the top three challenges faced by small business owners. The ongoing labour crunch has made it difficult for many companies to find and retain skilled workers, while supply chain issues have led to delays and increased costs for businesses across various sectors.

Banking Crisis and Rising Interest Rates

Following the collapse of regional banks like Silicon Valley Bank, Signature Bank, and First Republic, concerns about the safety of banks and access to capital have grown among small business owners. Over 60% of those surveyed reported banking with community or regional banks, with respondents evenly split between those who have confidence in the American banking system and those who do not. While the majority of business owners believe their capital is secure, almost half say that accessing capital for operations remains a challenge.

The Impact of Higher Interest Rates on Business Expansion

With the Federal Reserve raising its benchmark rate and many business loans exceeding double-digit percentages, some entrepreneurs have expressed concerns about how the higher interest rate environment is stifling business development. Business owners like Mitchel Sellers of Iowa Computer Gurus have noted that the increased cost of borrowing is limiting their ability to expand and seize growth opportunities.