According to the results of TD Bank’s 2023 Small Business Survey, inflation was identified as one of the top business concerns impacting small businesses. The survey collected insights from more than 500 small business owners with between $250,000 and $5 million in annual revenue about challenges, priorities and trends heading into the second half of 2023.
In addition to 62% of business owners naming inflation as one of their primary business concerns, other top areas of concern were:
- Employee retention and management (24%)
- Product shortages (21%)
- Keeping up with competition (20%)
“In response to rising interest rates and inflation driving up the cost of doing business, small business owners have had to increase spending to stay competitive,” Chris Giamo, head of commercial banking at TD Bank, said. “That, coupled with consumers rethinking spending habits, means that inflation is making it harder for businesses on multiple fronts to increase profits and revenue. As a bank, we have seen firsthand the important role financial institutions play in helping business owners access the capital they need to safeguard their business and maintain the loyalty of their customers in challenging times.”
A Hopeful Future
Even with the volatile macroeconomic environment, tight labor market and the threat of a recession impacting various aspects of their businesses — from talent to product shortages and more — small business owners s continue to have faith in their businesses’ success. In fact, 80% reported feeling optimistic about their business performing well in the year ahead, while 20% reported concern about their small businesses’ survival.
“As a business owner, one of the most important relationships you can develop is with your bank,” Amy Dinkar-Patel, head of small business and commercial distribution at TD Bank, said. “Banks serve in the same community where business owners live and work. This allows them to channel their local expertise into helping SBOs create a successful business strategy that prioritizes growth and stability. With small businesses striving to thrive in the year ahead, having a trusted banking partner at the table will be crucial.”
Small Business Priorities
To actualize a positive business performance for the remainder of 2023, small business owners s are setting their sights on reinforcing the financial strength of their businesses, beating out the competition and tackling talent retention.
In addition to navigating the daily challenges of running a business, small business owners s believe prioritizing the following areas will be key to achieving long-term business goals amid challenging economic conditions:
- Neary one in five (17%) small business owners s identified surviving as a business as their top priority for the second half of 2023. For 35% of small business owners, this means applying for a loan or line of credit this year to make crucial investments in their businesses that will set them apart from the competition.
- Although one in five (20%) small business owners reported concern with keeping up with competition, only 9% are prioritizing competing with other businesses. In fact, most small business owners are focused on running their own race, with 35% choosing to prioritize attracting and retaining their customers rather than focusing on competitors.
- When it comes to employees, 70% of small business owners are prioritizing retaining their staff, with only 4% of small business owners selecting cutting employees as a priority despite economic concerns. Reassuringly, 26% of small business owners are prioritizing hiring more employees.
