While the COVID-19 restrictions and shutdowns of 2020 may feel like a distant memory, small businesses still face many challenges in the post-pandemic world. Factors like the economy, inflation, organized retail crime, and an ongoing labor shortage pose challenges to the growth and success of small businesses.
To help entrepreneurs navigate the current business landscape, Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy at the U.S. Chamber of Commerce gave a Small Business Update during CO—’s Start. Run. Grow. Week. He provided some context for the obstacles small businesses face today, as well as practical solutions and paths forward.
Inflation, debt, and a potential recession
Many small businesses have had to pay higher rates for inventory and supplies as a result of inflation. According to the 2022 Q3 MetLife & U.S. Chamber of Commerce Small Business Index, 70% of business owners have raised their own prices as a response, and 40% have had to take out loans to stay afloat while waiting to receive payments from customers.
Bradley advised small business owners in this position to consider long-term ramifications when making financial decisions — especially if the economy enters a recession.
“If you’re taking out loans to be able to manage the cash flow … for the higher prices that you’re paying today and [delayed payments] from your consumers, how much increased debt are you taking on?” he said. “You have to be really careful about where you end up if we are in a recession, and what you’re going to have the wherewithal to manage through.”
Bradley did offer a positive indicator for the economy: Despite fears of a recession looming, the U.S. hasn’t seen typical signs of recession, such as decreased hiring, investments, and consumer spending.
“We’re … maintaining at elevated levels [for these indicators],” said Bradley. “We’ve come down off a peak, but we are not heading down into negative territory.”
[Read more: Are We in a Recession? What Small Businesses Need to Know]
This is not the shoplifting of old. This is highly organized theft, and it’s taking advantage of changes in the law and people figuring out how they can avoid accountability.
Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, U.S. Chamber of Commerce
Organized retail crime
Organized retail crime is on the rise worldwide, and it can cause significant financial damage to small businesses that are targeted. Bradley explained that the dollar amount for prosecuting organized retail crime has increased and there is “no aggregation for multiple offenses.” Therefore, it’s easier for criminals to coordinate multiple attacks on retailers. Additionally, because sellers aren’t always required to provide basic information in online marketplaces, these crime rings can sell stolen goods to unknowing shoppers relatively undetected.
“This is not the shoplifting of old,” stressed Bradley. “This is highly organized theft, and it’s taking advantage of changes in the law and people figuring out how they can avoid accountability. We’ve called forth the U.S. Chamber to apply the basic principle [of providing basic information] to online sellers.”
Bradley also urged states to get rid of the aggregation loopholes and encouraged prosecutors to pursue organized retail crime more aggressively.
The global workforce shortage
According to data from the U.S. Chamber, there are currently 4 million more open jobs than there are people looking for work. Bradley cited numerous reasons for the global decline in people seeking employment, including parents who can’t afford childcare, workers who retired early, and entrepreneurs who started their own businesses during the pandemic.
Small business owners who need workers may feel it’s hard to compete with the salaries and benefits packages offered by larger companies with greater resources. However, Bradley said small businesses have the advantage of flexibility, which allows small employers to better help employees balance family needs and obligations, or reconcile financial or health challenges with their work schedules.
“Small businesses have a tremendous competitive advantage because of [their] ability to really know … the people who work for you, and how [to] help [employees achieve] balance,” he explained.
[Read more: Insider Tips for Finding Talent in a Tough Hiring Market]
Small businesses can also enlist the aid of third-party benefit providers like finding childcare or mental health providers.
“There are services that help you do that, that are pretty economical and [that] actually the meet the needs of employees,” said Bradley. “Part of it’s just connecting your business with theirs and providing those benefits.”
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
