Small Businesses Face Economic Strain Even With Loyal Patrons

Brand loyalty is one thing, but when that loyalty is directed at a small business, it stands to benefit an entire community.

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The relationship between a small business and its customers is unique — rarely is it purely transactional. In fact, 37% of Americans say they purchase from small businesses to receive a more personal experience. Also, 30% of them are willing to pay more and 30% are willing to wait longer at small businesses versus major retailers or chain stores, according to a new NerdWallet survey of over 3,000 U.S. adults conducted online by The Harris Poll from Oct. 3-5, 2022.

So when small businesses feel economic strain, it’s often experienced in tandem with their customers. Prices and offerings may change, staff may come and go — and some customers may visit less often as a result.

In this recent survey of small-business owners and consumers, we get a look at how these proprietors are managing the effects of the current economy, and we use their patrons’ insights to provide timely advice.

“Small businesses can get hit particularly hard when the economy is in turmoil,” says NerdWallet small-business specialist Kelsey Sheehy. “Rising costs mean consumers have less to spend, with many putting off purchases big and small. At the same time, everything is more expensive for business owners, too. Small-business owners will need to get creative, once again, to weather the ongoing economic uncertainty.”

By Elizabeth Renter – Read this article in its entirety HERE on NerdWallet’s website

Key Findings

Small businesses are facing economic challenges. More than half (55%) of small-business owners say one of the biggest challenges their business is facing right now is finding and/or retaining customers, according to the survey of 906 small-business owners. But the economy is rearing its head too — 37% of small-business owners cite inflation and 30% cite finding inventory or supplies among the biggest challenges their business is facing right now.

Customers are witnessing these challenges. Four in 10 Americans (40%) say they’ve noticed small businesses going out of business within their local community within the last 12 months, according to the survey. Four in 10 (40%) said they’ve noticed higher prices and 38% have noticed staffing shortages at the small businesses they support during this period.

Small businesses are finding ways to cope. The most commonly cited actions small businesses have taken in the last 12 months to cope with recent economic conditions are increasing their social media presence (33%) and increasing prices for goods and services (33%). Nearly as many (31%) say they’ve adjusted operating hours during this period in an effort to cope with recent economic conditions.

Americans support small businesses. More than 9 in 10 Americans (92%) say they support (spend money at) small businesses. Three in 10 Americans (30%) say they’re willing to pay more for products and services purchased at small businesses versus at a major retailer or chain store, according to the survey.

Small businesses in the current economy

Inflation is high, supply chains congested and interest rates elevated — it’s a tough time to be a small-business owner, and many of these constraints are…

Read on…article continues HERE on NerdWallet’s website

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