Despite the tumultuous past year, small business owners (SMBs) are confidently moving toward 2023. The Bank of America’s national 2022 Women and Minority Business Owner spotlight report released recently highlighted that a resounding 66% of SMBs in the US predict higher revenue in 2023 — reaching an optimism high not seen for seven years!
SMBs continue to monitor inflation and supply chain issues
Despite the looming threat of a potential recession, business owners remain confident in their ability to weather economic challenges. Although 67% are concerned that this could impact their operations over the next year, 77% assert they have adequate preparation for such an event. Inflation and commodities prices still prove difficult matters.
However, these concerns have decreased since springtime with ripple effects intensifying worries about interest rates and credit availability. To offset inflationary pressures as well as difficulties around supply chain issues, businesses on average responded by raising prices by 9%.
As businesses across the nation strive to meet labor shortages, hiring plans have reached their highest levels in seven years. A staggering 61% of business owners report feeling the pressure – 49% are putting in longer hours and 31% raising wages for better talent acquisition prospects. Unfortunately, 30% remain unable to fill job openings as competition soars high on both sides.
Women business owners show a positive outlook as 47% plan to expand their business
Women entrepreneurs are showing strength in their businesses, with many expecting growth and feeling prepared to face economic challenges. However, despite these promising indicators of resilience, female business owners remain slightly more cautious about the future than males.
More women entrepreneurs said that they are self-taught as compared to their male counterparts. While 25% are comfortable with their current financial knowledge level, 75% of women business owners wish they were more knowledgeable about small business finances including accounting, managing cash flow, and securing grants.
Access to capital is a top concern for Black and Hispanic-Latino business owners
Hispanic-Latino business owners (46%) report facing significant difficulties when it comes to accessing capital. Among the most common challenges are not having a relationship with lenders (39%), feeling underqualified or uninformed about applying for funds (26%), and being unsure of where to apply for capital (24%).
46% of Black business owners and over 50% of Asian American and Pacific Islander (AAPI) business owners say they’ve faced issues accessing capital. They too reported facing challenges of not feeling properly qualified or informed on applying for capital, not having a relationship with a lender, and not knowing where to apply for capital.
Hispanic-Latino business owners believe they will achieve equal access to capital by 2031, whereas Black business owners expect equal access to capital by 2035 and AAPI business owners by 2039.
Hispanic-Latino business owners are inspiringly self-taught but yearn for more knowledge of small business finances to reach their potential. Understanding the complexities of subjects like credit, capital and accounting could be invaluable in helping drive success.
Hispanic-Latino business owners are actively embraced and encouraged by their communities, with 88% giving back in return. Most of them are confident in their entrepreneurial skills and feel set up for future success.
Black business owners are taking action towards advocating for social change in a meaningful way, with tangible effects – however, the majority still feel as though they have to work harder than their white counterparts if aiming for success. Three-quarters of Black entrepreneurs believe that extra effort is needed on their part compared to their white counterparts.
Read next: 5 trends that SMBs should be prepared for in 2023