Increasing Inflationary Pressures, Higher Energy Costs Squeezing Small Businesses, New Survey Data Shows

Small business owners say inflation is hurting their ability to hire and retain workers, forcing them to raise prices on consumers; 88% of respondents say inflationary pressures on their business have worsened since January

73% of all respondents across all sectors say rising energy prices are impacting their business

Small business owners across the country are reporting inflationary pressures are hurting their bottom line and adversely impacting their ability to hire and retain workers, according to new survey data of small business owners from Goldman Sachs 10,000 Small Businesses Voices. Ninety-one percent of small business owners say broader economic trends, such as inflation, supply chain issues, and workforce challenges, are having a negative impact on their business. Further, nearly three quarters (73%) of all small business owners across all sectors said increasing energy costs are having negative impacts on their bottom lines.

The health of the economy is another worry, as 56% of small business owners say the economy has worsened since January 2022. And while hiring and retaining qualified workers remains the top challenge cited by small business owners, concern for inflationary pressures have increased over the last few months; 88% said inflationary pressures on their business have increased since January 2022. Previous worries have not abated: over that same period, 80% said supply chain challenges worsened or stayed the same and 88% said hiring challenges worsened or stayed the same. Only 5% believe both inflation and supply chain challenges will subside within the next six months.

“Small business owners are stuck between a rock and a hard place as inflation and an uneven economic recovery are impacting every part of our businesses with no end in sight,” said Khari Parker, a member of Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and Owner of Connie’s Chicken and Waffles in Baltimore. “Small business owners need policymakers to understand that while most businesses have fully reopened since the pandemic, the road to a full recovery will be long – with new challenges around every corner.”

Inflation has contributed to workforce challenges, as the high costs of attracting and retaining employees is affecting small businesses’ bottom lines and ability to do business, according to the survey. Eighty percent of small business owners say their business’ financial health has been negatively impacted by inflation over the past six months. Of those, 67% have increased wages to retain employees, while 61% have increased wages to attract new employees. To offset these increased costs, 60% have passed them through to the consumer by raising the prices of goods or services.

Small business owners believe it is a tale of two recoveries. Eighty-eight percent of respondents say small businesses are struggling relative to larger companies in their local communities. The feeling of a recovery favoring big business goes deeper, with:

  • 42% reporting they have lost employees to larger businesses that are paying more;
  • 65% of businesses impacted by supply chain challenges saying it is a problem for their business that suppliers are favoring large businesses over small businesses; and
  • 70% worry about employees leaving their businesses because larger businesses can offer higher pay and more generous benefits.

Small business owners believe Congress can better support small businesses with more modern programs. Eighty-six percent believe the federal government should do more to level the playing field so small businesses are better able to compete with larger companies, while 93% say the federal government should do more to tailor programs and services to better reflect the realities and needs of small businesses.

“Small businesses are sending a clear signal that the economy and the challenges they face – like inflation, workforce, supply chain and energy costs – are going from bad to worse,” said Joe Wall, National Director of Goldman Sachs 10,000 Small Businesses Voices. “It has been twenty-two years since Congress reauthorized the Small Business Administration. With small businesses struggling to compete with larger companies and suffering setbacks as they recover from the pandemic, it is time to modernize the Small Business Administration through reauthorization to meet the challenges of today’s economy.”

This data is based on a survey of 1,107 Goldman Sachs 10,000 Small Businesses participants conducted by Babson College and David Binder Research from April 11-14, 2022. The survey included small business owners from 48 U.S. states and two U.S. territories.


Goldman Sachs 10,000 Small Businesses Voices is an initiative for program participants to organize and advocate for policies that matter to them. It builds on Goldman Sachs 10,000 Small Businesses, which over the past decade has provided access to education, capital, and support services to more than 10,000 small business owners across all 50 states, Puerto Rico, and Washington D.C.


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