More than three-quarters of small business owners believe that their company is equipped to handle any upcoming economic instability, according to new research.
The survey of 1,000 small business owners revealed that increased interest rates (61%), inflation (59%) and a looming recession (44%) are small business owners’ top economic concerns for the remainder of 2023.
Results revealed that record-high inflation has driven small business owners to make tough decisions about their businesses this year (62%).
Specifically, small businesses have tapped into different financial resources including savings accounts and loans (61%), adapted prices (50%) and reduced the production of various goods and services (45%).
Other small businesses have raised prices (38%) or reduced staff (35%) as a result of inflation.
Conducted by OnePoll on behalf of Melio, the survey asked small business owners about inflation and the impact of the rocky economic climate.
Though almost half (48%) of respondents have raised their prices by an average of 7% over the last six months, those that increased their prices are still reporting an increase in repeat business (66%), sales (63%) and number of new clients (56%).
Interestingly, despite inflation and other economic concerns, 72% of small business owners feel more optimistic now about the financial prospects of their company than they did at the beginning of the year.
This might be due in part to some of the changes they have made this year: respondents have increased their advertising and marketing efforts (66%), increased their digital presence (58%) and started selling products online (52%).
In fact, more than two-thirds (67%) believe that having an online presence is more important to small businesses than it used to be.
“Despite the challenges posed by inflation and interest rates, small business owners seem to adapt to the current economic climate and demonstrate impressive agility and resilience,” said Tomer Barel, Melio’s president and COO. “Small businesses are the foundation of the economy, and it is critical that they have the tools to overcome future challenges.”
Small businesses are interested in digitizing or further digitizing all aspects of their businesses, including bookkeeping and payments (53%), inventory management (51%) and customer service (42%).
But even beyond the importance of their digital footprint, three-quarters feel that it is more imperative to accept forms of payment beyond cash than it used to be.
“Since the pandemic began over three years ago, there’s been a strong demand for tools to help small businesses digitize – and that trend has only continued in 2023,” said Prashant Gandhi, Melio’s CBO. “Small businesses are embracing new technologies that can help them take control over their finances and weather economic uncertainty.”