New Data: Small Business Owners Are Struggling to Survive Because of Inflation

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Running a business isn’t. A new report is saying that because of inflation, it’s as challenging as ever. 

Clarify Capital is reporting that 3 out of 4 businesses are raising their prices to combat rising costs. The findings come from a survey they conducted with 500 on-site and remote business owners earlier this year. 

The findings are interesting. Inflation (42%) is the biggest threat to business owners, 7x more of a concern than employee retention. 76% of small business owners report raising their prices by 27%, on average, to combat inflation.

Overall, over half of businesses have lost customers because of increased pricing- retail businesses (62%) were most likely to see a decline. 17% of businesses are worried about going out of business this year. The report also highlighted who has been affect: Some of the hardest hit industries in the country were on-site businesses such as those in retail and hospitality, which, depending on their respective state, were forced to either transition to pick-up orders or to close entirely for varying periods of time. As the pandemic continued, rising costs and changes to the labor market caused even more difficulties. It should be no surprise, then, that on-site small-business owners reported the greatest negative impact from issues across the board, including inflation, supply chain issues, labor shortages, and employee retention. 

The report also highlighted how business owners are dealing with the astronomical costs.

More than three-quarters of the small-business owners we surveyed had to raise their prices to offset inflation costs in 2021. Hybrid workplaces were the least affected by this issue, although 49% still reported losing business as a result. Meanwhile, 55% of on-site business owners said the same, as did 54% of those who had adopted a remote work model. Nevertheless, 44% of all respondents said they would have to continue raising prices to mitigate inflation.

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