By Kailyn Lamb, Marketing Content Writer and Editor, PYA
The latest “MetLife and U.S. Chamber of Commerce Small Business Index” shows small business owners are starting to feel optimistic again as numbers hit a pandemic-era high of 64.1 percent. The U.S. Chamber released the data in late March.
In a news release on the score, the Chamber stated that despite inflation, small business owners are feeling optimistic about the health of their businesses. The release also states that two in three businesses raised prices to deal with inflation issues. The results came from a poll taken from January 14-26, 2022.
We spoke with Laura Overstreet, Director of the Tennessee Small Business Development Center (TSBDC), to get a feel for how businesses in the East Tennessee area are feeling about inflation.
Small business recovery has been dependent on industry, Overstreet said. Hospitality-centered businesses such as hotels and restaurants were hit hard during the pandemic and continue to be hit hard with inflation. People are eating out less because the prices are going up, she said.
One part of inflation that no one can avoid is rising fuel costs. Overstreet called it a “hit upon a hit.”
“Of course, the fuel costs rising causes everything to rise.”
Across the nation, 67 percent of businesses said they had to raise prices due to inflation, according to the U.S. Chamber release. Both Overstreet and the U.S. Chamber release said inflation is limiting the purchasing power of small businesses.
In order to survive the pandemic, many of the clients at the TSBDC had to become more dynamic and innovative, making changes to stay afloat, Overstreet said. Now, as continued supply chain and inventory issues plague businesses, their owners are saying they don’t see an end in sight. This aligned with national sentiment, as the U.S. Chamber poll showed 85 percent of businesses were concerned with the impacts of inflation. Labor shortages and increased labor costs are also impacting businesses.
Because of these issues, TSBDC clients are delaying construction projects. Businesses that were in the middle of construction projects have seen prices go up, even doubling in some cases. Other businesses have stopped adding employees. Even if people were there to hire, some businesses cannot afford to do so, Overstreet said.
Overstreet said inflation issues are “another storm” businesses are weathering right after the pandemic. Many business owners are stretched thin, wearing even more hats than they usually do.
“They don’t want to sacrifice the quality of their product or service,” Overstreet said. “They want to maintain that same level, so they’re just taking on a lot of roles that they don’t typically have to take on.”
Overstreet finished by saying that many of these issues are not unique to Knoxville and are probably seen in many mid-sized markets.
Read more on the U.S. Chamber “Small Business Index” here.