It’s been a long two years for small business owners navigating the ups and downs of the pandemic. But despite this, 61% of business leaders surveyed by JPMorgan Chase Insights say they expect profits to increase in 2022. And, 71% said they’re optimistic about their company and industry.
The survey was conducted before the omicron wave, but even so, it shows surprising resilience in the face of the pandemic.
Part of the optimism may stem from the way businesses adapted, with many moving online fast, and the fact that the strongest business survived the wave of closing in 2020. The percentage of firms going all in on eCommerce was up 7% from last year, to 19% from 12%, according to a JPMorgan Chase spokesperson. More than half of respondents are maintaining a Facebook page, 35% are posting to Instagram and 22% are paying for digital advertising.
Small businesses were defined as those with revenue of $100,000 to $20 million.
The New York-based bank focused on Black, Hispanic and Latinx business owners in its analysis of about 1,000 owners across the country – almost half of which were people of color. It found Black business owners are “significantly more” optimistic than others about the economy. They’re also predicting higher revenue in the year ahead than their peers – 80% versus 63%, according to the spokesperson – despite being hit especially hard by the pandemic.
The survey reveals significant demand for funding sources for small businesses – nearly 7 in 10 report planning or needing financing in 2022, up from 59% a year ago, according to the spokesperson.
Small Businesses Plan to Use Credit Cards
A little less than half of businesses surveyed plan to use a business credit card as a funding source, up 10% from last year. (Experts generally advise against using high-interest-rate credit cards for long-term financing). Nearly 30% of businesses plan to fund with their business line of credit, and demand for traditional or online loans is up 8% from last year, to 29% from 21%.
The need for credit to increase is the clearest among Black, Hispanic and Latinx business owners and operators – 50% of Hispanic and Latinx business leaders expect credit needs to increase, and 64% of Black business leaders expect the same.
Chase’s researchers surveyed decision-makers at businesses across industries such as restaurant, retail, construction, and professional services in November for this report. The bank also published a second report with results from businesses that bring in an annual revenue of $20 million to $500 million.
On top of many business owners’ concerns is economic uncertainty. More than 40% say that bringing down inflation should be the number one priority for the government during 2022.
Interestingly, there was a regional trend in businesses who said the pandemic had a “very positive” impact. Respondents in areas of the Northeast, including New York and New Jersey, the South, including Florida and Texas, and parts of the Midwest, including Illinois and Michigan, were more likely to say so, according to the report.
Nearly half of owners and operators surveyed are seeking to hire in 2022, a higher percentage than in the last 3 years, according to the report. More than half who plan to hire said it was because of expected sales growth.
Still, there remains a concern of a labor shortage. Many are still feeling “extremely concerned” (23%) or “very concerned” (19%) about the limited supply of qualified job candidates. And Black, Hispanic and Latino business leaders are significantly more concerned, according to the report.
Owners continue to entice workers to stay, most commonly through flexible working hours and increased pay. This is especially true for Black and Latinx owners – 64% of Hispanic and Latino business leaders and 56% of Black business leaders reported that they have increased or will increase wages.
Business owners are also boosting benefits for their employees and shifting to make a healthier workplace. About 60% of respondents believe their core values as a business owner have changed since the pandemic, and 27% say they value relationships with their employees more.
More business owners are expecting to move forward with a hybrid model, showing how work is becoming more flexible. In 2020, 19% of respondents expected to move to hybrid. Now, 24% expect to.
This story and others on Times of E are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.