Inflation has become the number one concern among entrepreneurs, according to a new survey conducted by Capital One Business, in partnership with NextGen Chamber of Commerce and the Capital One Insights Center.
Among a sample of 1,200 small business owners and 300 auto dealership owners, 48% say inflation is the top business challenge in the past year. Cash flow was the second driving concern at 40%, followed by low sales at 36%, and then persisting supply chain issues at 28%.
Most small business owners (77%) are concerned about the short-term impacts of inflation, within the next three months, as approximately a third are feeling ‘very concerned.’
Entrepreneurs who have taken action to mitigate the potentially negative impacts say they have built up cash reserves (27%), preemptively raised prices (23%), and purchased more inventory (21%). A significant number (34%) of small business owners still say no action has been taken to combat rising prices.
Despite the volatile economy, nine-in-10 small business owners are confident their business will be operating in the next six months. While the confidence is there, only 43% of small business owners say business conditions in their area are either excellent or good. This is a steep drop-off compared to June 2021, when 59% were satisfied with their conditions.
Traversing these difficult financial times has taken a toll on entrepreneurs. Twenty-four percent of small business owners say they are experiencing burnout, a syndrome resulting from chronic stress at work that is characterized by overwhelming exhaustion, negative attitudes or a lack of commitment. Gen-Z (38%) and millennial (30%) small business owners and dealership owners (41%) are feeling the impacts the most.
Looking ahead to the rest of 2022, nearly a quarter of small business owners say they are still mainly focused on profit growth, despite the margin-tightening conditions driven by ongoing inflation.