Small business owners across the country and in Iowa are reporting that 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.

Among the more than 1,100 small business owners surveyed, 91% said broader economic trends such as inflation, supply chain issues, and workforce challenges are having a negative impact on their business. Further, 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 with 88% saying inflationary pressures on their business have increased since January.

“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 Tom Rauen, owner of Envision Tees and Dimensional Brewing Co. in Dubuque. “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.”

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. Other indicators respondents say indicate the recovery is favoring big businesses include:

• 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
• 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, said Joe Wall, the national director of Goldman Sachs 10,000 Small Business Voices..

“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,” Wall said. “It has been 22 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.”