Goldman Sachs survey finds small business facing unprecedented challenges

Global financial services giant Goldman Sachs has released new survey data that quantifies the challenges facing the small-business community more than two years since the start of the COVID-19 pandemic. The new “Summit Survey” finds an overwhelming majority of small-business owners still have deep concerns about the trajectory of the economy, with 93 percent worried about the United States experiencing a recession within the next year and 89 percent reporting broader economic trends, including inflation, supply chain and workforce challenges, are still taking a toll.

The survey was released ahead of Goldman Sachs’ 10,000 Small Businesses Summit held last week in Washington, D.C., where more than 2,500 small-business owners, including nearly 70 from Utah, met with over 400 government officials and elected representatives to advocate for solutions to the challenges they face, including access to capital, workforce and competitiveness, childcare and government contracting.

“Entrepreneurs everywhere are facing a bumpy economic road ahead even as they have overcome the obstacles of the last few years,” said David Solomon, chairman and CEO of Goldman Sachs. “So it’s important that we bring together leaders from the private and public sector who can work together to support the source of economic vitality in America: our small businesses.”

“Over the past two-and-a-half years, small-business owners have faced a once-in-a-century pandemic, once-in-a-generation inflation, unprecedented supply chain disruptions and historic challenges finding qualified employees,” said Natalie Kaddas, owner of Kaddas Enterprises in Salt Lake City. “Washington has helped us through the worst of it, but it’s clear that more needs to be done.”

According to the survey, difficulty hiring and retaining workers remains the most significant problem facing small businesses, with 84 percent saying that hiring challenges have gotten worse or stayed the same over the past three months. Of those that have had difficulty hiring, a staggering 97 percent report that it has impacted their bottom line. Of small-business owners hiring, 55 percent say that, on average, it takes more than two months to fill an open position with a qualified employee. And when asked the top reasons for hiring challenges, 78 percent cited competition with larger employers on pay and benefits.

Record inflation and ongoing supply chain challenges continue to have an outsized impact on small businesses as well. Ninety-seven percent of small-business owners said that inflationary pressures on their business have increased or stayed the same compared to three months ago, while 65 percent have had to increase the prices of their goods or services to offset the negative impact of broader economic trends and 38 percent have seen a decline in customer demand as a result of inflationary price increases. Making matters worse, 80 percent say that higher gas prices are negatively impacting their business and 78 percent say supply chain issues have gotten worse or stayed the same compared to three months ago, the survey found.

Despite these broader trends, however, nearly two-thirds (65 percent) of small-business owners remain optimistic about the financial trajectory of their own business in 2022. Despite the unprecedented challenges of the past few years, small-business owners remain resilient, overcoming obstacles and finding innovative ways to grow their companies, create jobs and strengthen their communities, study authors said.

The data is based on a survey of 1,533 Goldman Sachs 10,000 Small Businesses participants conducted by Babson College and David Binder Research from June 20-23. The survey included small-business owners from 48 U.S. states and two U.S. territories.