The Small Business Index of MetLife and the US Chamber of Commerce is celebrating five years

This quarter, MetLife and the US Chamber of Commerce’s Small Business Index celebrate five years since publication. As the Index celebrates this stage, we look back to five years of small business trends, the main challenges facing small business leaders, and how small businesses feel about the future.

The Small Business Index is a leading tool for tracking the mood and prospects of small business in the United States. The index’s reports are published on a quarterly basis and consist of 750 unique interviews with small business owners and operators. It provides a comprehensive quantitative picture of the small business sector. Read the latest report here.

Highs and lows of small business

Despite the challenging economy, the current small business index peaked in the pandemic era at 66.8 this quarter. This is slightly higher than the result for the last quarter of 64.1.

Of course, the result for this quarter is still far from the highest of all time. This result, 71.7, was recorded in the first quarter of 2020, just before the COVID pandemic began (the survey in that quarter was conducted in January 2020, before any significant shutdowns in the United States).

The lowest point for the index was reached only a quarter later, Q2 2020, when the result reached 39.5. This coincided with the first full quarter, during which major pauses began in response to the pandemic. Since then, the index has slowly taken hold, despite a significant step backwards, when the Delta version of COVID-19 appeared in mid-2021.

Small business owners are working harder

In the last five years, a key finding has emerged: in a post-pandemic world with a large labor shortage, small business owners report working longer than before.

In fact, half (50%) of small business owners say they work more hours now than a year ago. This question was asked for the first time in the first SBI (Q2 2017). Five years ago, 30% said they worked more hours. This equates to a very significant increase of 20 percentage points in the share of small business owners who report working more hours.

Small business access to capital less than “Very good”

In general, today’s small businesses consider the quality of their access to capital to be worse than five years ago. In 2022, more small business owners say that their access to capital is simply “good” and not “very good” compared to when we first asked the question in 2017. More also say that their access to capital is simply “fair.”

Today, 40% say they have good access to capital or loans, while another 14% state that they have very good access. This represents a sharp decline in the share of small businesses that rate their access to capital as very good (14% vs. 33%) compared to when we first asked this question in our first SBI (Q2 2017).

Meanwhile, 26% now consider their access to capital to be fair, compared to 14% who said the same in 2017.

In 2022, inflation problems dominate

During this quarter, small businesses say inflation is their most important concern. Forty-four percent of small businesses surveyed cite inflation as the biggest challenge facing small business owners, up from 33 percent in the last quarter. This is significantly up from 19% when the question was first asked in the third quarter of 2021. In addition, almost nine out of ten (88%) are concerned about the impact of inflation on their business, with almost half (49%) indicate that they are very concerned (up from 44% in Q1 of 2022 and 31% in Q4 of 2021).

To keep up, many small businesses are reporting that they are raising the prices they charge customers. The vast majority (69%) of small businesses surveyed reported rising prices for their products or services due to inflation in the last year. This is in line with 67% who reported rising prices due to inflation in the last quarter. Nearly half (46%) reported taking out a loan to cover higher costs due to inflation (from 39% in the first quarter of 2022).

Lasting trend – small business is sustainable and optimistic

One striking thing for small business owners over the last five years is their steady optimism that things will improve in the future, no matter what challenges the present poses to them. And this quarter is no different.

Looking ahead to next year, 43% of small businesses plan to increase their staff – an increase of six percentage points compared to the last quarter. Meanwhile, 43% expect to invest more next year, and 66% expect revenue to increase, both on a par with the first quarter of 2022.

It takes a lot of tenacity, determination and hard work to start and maintain any small business. If nothing else, SBI has shown over the past five years that small business leaders have something else that sets them apart: relentless optimism.

For more findings from this quarter,and to view and view data on small business for years, visit: https://www.uschamber.com/sbindex/.

About the authors

Thaddeus Swanek

Thaddeus Swanek

Senior Writer and Editor, Strategic Communications, US Chamber of Commerce

Thaddeus is a senior writer and editor on the Strategic Communications team at the US Chamber of Commerce.

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