Small BusinessSurvey 2022
Verizon Business’ 3rd Annual State of Small Business Survey 2022
Verizon’s third annual State of Small Business Survey shows technology is playing an important role in the ongoing success of many small and midsize business decision makers, many of whom say this year hasn’t necessarily played out as expected..
Facing complex challenges like inflation, labor and concern about the overall state of the U.S. economy, business owners have tempered their expectations ahead of the 2022 holiday season. At the same time, most small businesses believe digital tools and technologies have helped them adapt and grow.
Nearly half of those surveyed (46%) believe the overall state of their business is better off now than a year ago, while 68% of small and midsize business decision makers expected their business to be doing better in 2022 vs. 2021.
Conducted in August 2022 by Morning Consult, the annual Verizon survey–now in its third year–reflects the shifting priorities, attitudes and pressures facing nationwide small and midsize businesses. With responses from 600 small and midsize businesses, the State of Small Business Survey builds on two studies from 2021 & 2020, over the same time period, just as small businesses began navigating their way through the pandemic’s effect.
Economic forces at work.
Small and midsize business decision makers are nearly unanimous in their economic angst, with 89% saying they are concerned about the state of the U.S. economy. Many also cite increased costs (78%), with nearly half (46%) reporting declining sales and more than a quarter (27%) withdrawing from cash reserves.
A full 82% of respondents express inflation worry, and, compared to 2020 and last year, respondents this time are more likely to be concerned about their own financial security (72% in Aug. 22, vs. 66% in 2021 and 67% in 2020). However, 80% of respondents say they haven’t laid off employees and 87% haven’t reduced their employees’ wages.
Other key stats
- Discrepancies in small business owners 2022 expectations: While 68% of small and midsize business decision makers expected their business to be doing better in 2022 vs. 2021, only 46% say that business has improved.
- Hospitality industry hit hard. Businesses surveyed in food & beverage, restaurants & bars, and retail are more worried than other industries with the aim of bouncing back to pre-COVID business levels with a more cost-conscious public. Ensuring inventory levels or fulfillment schedules amid continued supply chain disruptions was a concern for food & beverage (72%), restaurants & bars (69%) and retail (62%). Cash flow disruptions were also a concern: food & beverage (65%), restaurants & bars (59%) and retail (66%).
Holiday blues ahead?
As they prepare for this year’s holiday season, 44% of small and midsize business decision makers believe supply chain issues could dampen holiday sales. Those working in retail are the most worried about economic issues, while supply chain issues dominate concerns among restaurant and bar owners.
Additionally, as businesses prepare for the 2022 holiday season, nearly 2 in 5 respondents (38%) are worried about properly pricing goods/services to keep up with inflation and 35% are worried about economic hardships impacting their holiday sales.
Other key stat
- Inflation and supply chain issues remain top concerns. Nearly half (44%) of business decision makers are concerned about supply chain issues affecting holiday season sales and one in three (35%) are worried about economic hardships and inflation impacting their sales.
A majority (56%) of small and midsize business decision makers surveyed are confident that they will be in a better spot a year from now than they are today – and that’s largely due to ongoing technology investments.
In total, 61% say they’ve implemented digital tools and technologies over the past two years to change their processes and improve customer experiences. And half of respondents say they have no plans to cut their planned technology investments due to rising inflation concerns.
About half of respondents (51%) have either added to or upgraded their Internet connection with strong bandwidth to support high-capacity activities in the past year. In all, 53% of businesses who have added connectivity technology say they are motivated by the potential to better connect with existing customers and 48% are motivated to drive customer acquisition.
Other key stats
- Technology investments the last to be cut: Compared to cutting spending on operational investments (39%) and employee events (59%), only 29% have already cut or plan to cut technology investments in the next six months.
- Connectivity technology upgrades driven by revenue: 53% of businesses who have added to their tech stack were motivated by the potential to better connect with existing customers, and 48% were motivated by driving customer acquisition.
- Innovation to match consumer tastes: 48% of businesses surveyed began offering new products and services to adapt to changing consumer needs in the past year.
- There is still lingering concern about cybersecurity consistent with previous years. A majority of small and midsize business decision makers consider the following a risk to their business this year: viruses (55%), malware and ransomware (54%), sensitive data vulnerabilities (51%), password theft (51%), and spam and phishing (50%).