Kabbage, an online lender operated by American Express, has published its periodic Small Business Recovery Report – its 7th installment. The survey queried 550 small business leaders which indicate that year-over-year revenue, between July 2021 and July 2022, almost doubled (87%) while profits remained flat.
Brett Sussman, Vice President Head of Sales & Marketing, Kabbage, claims that small businesses are not only surviving but flourishing even during historically high inflation and hiring challenges.
Survey data indicates that overall profits among US small businesses have slightly declined by 4% from July 2021 and July 2022. The data shows small businesses continue to anticipate future economic obstacles as 75% of respondents report feeling impacted by inflationary pressures and 56% expect pressures to last at least a year until the summer of 2023.
The report shares:
- 37% stated they plan to raise prices,
- 22% aim to negotiate better deals with suppliers
- 22% are cutting lower margin products and services from their offerings
- 33% of small businesses plan to prioritize customer relations and strengthen customer loyalty to help increase future revenue.
Small businesses are also adapting to the WFH movement by offering hybrid options. 49% of small businesses have started offering flexible work options to stay competitive in the labor market with hybrid work (27%) being the most popular option.
The top two areas where SMEs are prioritizing effort are digital transformation (41%) and digital marketing (47%)
While all of this displays small business resilience the economy is shifting rapidly as the US Federal Reserve battles the current administration as fiscal policy is at odds with monetary policy causing more problems. Inflation, once described as transitory, can no longer be ignored and the Fed has declared a need to stomp on inflation regardless of the impact it will have on the economy. The next Small Business Recovery Report will be far gloomier (and Kabbage should remove the term recovery).