88% of owners say inflation impacting their small business

A majority of owners report that inflation and supply-chain disruptions are impacting their small businesses, according to a new report from Bank of America.

Still, the 1,000 business owners surveyed across the country say their outlook remains strong, with 64% anticipating revenues will increase in the year ahead.

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Specifically, the survey found:

  • 88% of business owners say inflation is currently impacting their business
  • 76% say supply-chain issues are impacting their business
  • 31% are confident the national economy will improve, down from 50% in 2021
  • 39% are confident their local economy will improve, down from 56% in 2021

The key economic factors that most concern owners are inflation (80%), commodities prices (75%) and supply-chain disruptions (64%). International affairs are also concerns for 61%, and interest rates worry 57%. Health care costs are bothers for 57%, but that's lowest level in the 10-year history of the survey.

And while challenges loom, entrepreneurs reported a steady recovery from the pandemic. More than three in five owners feel their business has fully or partially recovered, and nearly half cited increased consumer spending over the past year. Additionally, 26% plan to hire - the highest percentage since 2018. Nearly one in five have increased employee wages.

Most also say they've raised prices due to inflation and supply-chain disruptions.

Looking to the future, many believe new cybersecurity platforms and automation will be important for success in the next decade. About 44% plan to prioritize digital sales over brick and mortar. And 70% have adopted new digital strategies in the past 12 months, including more banking online and accepting more forms of cashless payments.

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