Main Street small and medium-sized businesses (SMBs) believe inflation and COVID-19-related issues are their most pressing challenges, according to the Main Street Economic Health Survey, a PYMNTS and Melio collaboration that polled 532 U.S. SMBs.
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These businesses are slightly more concerned about inflation than COVID-19-related challenges, with 54% saying inflation is a challenge and 51% saying the same of COVID-19-related challenges.
There are some differences among SMBs with different sales profiles, industry segments and revenue, however.
SMBs that sell mostly in a physical store are more worried about inflation than COVID-19-related issues, while those that sell mostly online are slightly more concerned about COVID-19-related issues.
Those in the retail trade, construction or utilities, and professional services are more worried about inflation, while SMBs in personal and consumer services and food, entertainment and accommodations are more concerned about COVID-19-related issues.
Businesses of most sizes in terms of revenue are more worried about inflation, with only the smallest category (SMBs earning $250,000 or less) being more concerned about COVID-19-related issues.
Two other key worries about the current market environment were cited by more than 4 in 10 SMBs: uncertainty about economic conditions (46%) and difficulties hiring employees (41%).
The SMBs are mitigating these challenges in a number of ways.
To compensate for inflationary pressures and the extra expenses associated with hiring new employees and increasing wages, 22% have increased their prices in the last three months.
To handle the labor shortage, 43% require their staff to take on more tasks, 42% are paying their employees more, 31% have reduced the amount of work they otherwise could have taken and 22% have implemented technology that helps employees be more productive.
