July 25, 2024

Taylor Daily Press

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Most small businesses in America fear a recession

Most small businesses in America fear a recession

In the same survey a year ago, when increased vaccinations promised to end the COVID-19 pandemic, companies were more optimistic, with 67% saying the U.S. was on the right track. That changed in the latest edition, with 61% of respondents saying the US is on the wrong track.

78% of small business owners said the economy had worsened in the past three months, while only 5% said it had improved. Over the same period, 84% said hiring problems had worsened and 80% said inflationary pressures had increased.

This is the first time the quarterly survey has asked the recession question. 6% of those surveyed say they are not concerned about the recession, and 1% say they don’t know.

38% of respondents said supply chain-related issues have worsened in the past three months, while 40% said such issues remained the same.

One of the “most troubling data” in the survey was that 38% of small businesses said they saw a drop in customer demand as a result of price increases for goods and services, said Joe Wall, who leads Goldman’s 10,000 Small Businesses training program. .

The results will be discussed at a project summit in Washington next week, where more than 2,500 small business owners are expected to meet with more than 400 government officials.

Pay attention to the cost

Jill Bommarito, founder and owner of Ethel’s Baking Co near Detroit, is struggling to keep up with rising costs at her 30-employee company, which makes gluten-free dessert bars sold at Whole Foods and other grocery chains.

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The price of butter has doubled, his wages have risen 30%, packaging and shipping costs have risen and he now has to keep double inventory of the “cash-eating” product to avoid production disruptions, he told Reuters.

“We’re dealing with COVID, labor, inflation, supply chain issues, but the biggest problem right now is that we feel like we’re headed for a recession,” said Pomarito, who started Ethels in 2011 and is a member. The Goldman Project.

“I haven’t talked to another small business owner in the last couple of weeks that this is not a huge topic — how are we going to deal with this?” she said.

His plan involved “micro-managing costs”, conducting daily risk assessments, carefully selecting customer relationships to avoid over-extension and turning the product line into biscuits.

Despite a bleak outlook for macroeconomic challenges, 65% of business owners in the U.S. said they were optimistic about the prospects for their own business, and 65% said they currently employ full- or part-time employees.

The survey was based on responses from 1,533 participants in the Goldman Sachs 10,000 Small Businesses conducted June 20-23 by Babson College and David Binder Research.

One of the changes the companies are pushing for is the reauthorization and modernization of the Small Business Administration — a step that hasn’t happened in 20 years — as a federal agency that supports businesses with loan guarantees and technical advice.

Bommarito said the changes are needed to streamline the process by which banks approve SBA loans, which would make it “more attractive” for banks to lend to small businesses.

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