Goldman Sachs survey finds small business owners overwhelmingly plan to vote in November, with 81% saying they are more likely to support a candidate who pledges to reauthorize the SBA

96% of small business owners say inflationary pressures have increased or stayed the same since June, and 54% report a decline in customer demand over the past few months

Small business owners fear they are losing ground to bigger companies as they absorb inflationary pressures, compete for workers

With November’s midterm elections just eight weeks away, 86% of small business owners say they are definitely planning to vote, with 91% saying a candidate’s small business policy positions will play an important role in who they choose to support at the ballot box. Furthermore, 81% said they are more likely to support a candidate who pledges to reauthorize the SBA. The SBA was reauthorized by Congress seven times between 1980-2000, but has not been reauthorized since. Small business owners’ eagerness to vote – and vote their business policy interests – are among the major takeaways from a new survey of small business owners who are part of the Goldman Sachs 10,000 Small Businesses Voices program.

Small business owners also remain concerned about an economic recession, with 43% believing the US economy is already in a recession, and 62% anticipating a recession in the next year. Furthermore, they are experiencing recession indicators, with 54% reporting a decline in customer demand over the past few months, 46% pausing expansion plans, and 29% citing difficulty raising capital/higher borrowing costs. Only 16% of small businesses are reporting a hiring freeze.

"As we continue to face unprecedented headwinds brought on by the pandemic, small business owners across the U.S., and across party lines, are motivated to support elected officials who prioritize small businesses and the unique challenges we face,” said Janice Jucker, co-owner of Three Brothers Bakery in Houston, Texas, and a member of the Goldman Sachs 10,000 Small Businesses Voices National Leadership Council. “Reauthorizing and modernizing the Small Business Administration is at the top of our list. It has been 22 years since Congress last reauthorized the Small Business Administration, and business practices and realities have undergone a sea change since then.”

Inflation continues to worsen for small business owners, with 77% of respondents saying inflationary pressures have increased over the past three months and 19% saying they have stayed the same. Seventy-five percent say inflation has negatively affected their business’ financial health over the past six months. In a worrisome sign, 83% of small business owners say they are concerned their customers may turn to bigger companies given their ability to better withstand inflationary pressures and potentially offer more competitive pricing. This comes as 68% of respondents say they have raised the prices on their goods or services to offset the negative impact of broader economic trends. In general, 88% believe small businesses are struggling compared to bigger businesses.

Recruiting and hiring workers remains the top challenge for small business owners, with many reporting they are unable to compete with bigger companies for qualified workers. While 50% said hiring challenges have remained the same since they were last surveyed three months ago, 36% say hiring challenges have worsened. Seventy-three percent of small businesses experiencing hiring challenges cite competition with larger employers on pay and benefits as their biggest impediment, with 59% of those hiring reporting that on average, it takes them more than two months to hire a qualified employee. Macro-economic conditions are worsening the employee benefits gap with 59% of small businesses saying their 2022 employee benefits expenses increased compared with 2021, and 49% saying their benefits expenses increased by more than 11%.

"Small business owners continue to be hobbled by inflationary pressures and difficulty in hiring qualified workers – challenges which small business owners only perceive as becoming worse as larger companies are able to absorb inflationary pressures and offer more lucrative benefits packages in a way they simply can't do," said Joe Wall, National Director of Goldman Sachs 10,000 Small Businesses Voices. "Congress must prioritize the reauthorization of the Small Business Administration to put small businesses on stronger footing to compete with larger businesses.”

The new survey also includes some encouraging news: The percentage of small business owners who say they believe the country is moving in the wrong direction has declined 10 percentage points over the past three months, from 61% in June to 51% in the current survey. Twenty-nine percent say the country is moving in the right direction, climbing from 19% in June.

This data is based on a survey of 1,479 Goldman Sachs 10,000 Small Businesses participants conducted by Babson College and David Binder Research from August 29-September 1, 2022. The survey included small business owners from 47 U.S. states, Washington, D.C., and Puerto Rico.

ABOUT 10,000 SMALL BUSINESSES VOICES

Goldman Sachs 10,000 Small Businesses Voices is an initiative for program participants to organize and advocate for policies that matter to them. It builds on Goldman Sachs 10,000 Small Businesses, which over the past decade has provided access to education, capital, and support services to more than 10,000 small business owners across all 50 states, Puerto Rico, and Washington D.C.

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