Study - 47% of Small Businesses Risk Closing
Updated: Jul 28, 2022
If you have not seen this recent survey from Alignable you may want to take a look: 47% of SMBs Risk Closing by Fall.
The survey was conducted among 4,392 businesses in June and July. The key challenges affecting SMBs revealed in the report? Inflation, gas prices, rent hikes, labor issues, supply chain issues, reduced consumer spending, increasing interest rates, recession fears, and the fact that their cash war chest has not been built back from 2020-2021. It has been said that the three reasons a business gets in trouble are recessions, fraud, and stupidity. The latter two are always around, but recessions are not and they are out of the business's control, much like most of the issues cited.
If this were to actually extrapolate out to the broader economy, we would effectively no longer have an economy. Let's confidently assume that won't happen. Nevertheless, a chunk of these businesses will not make it to the other side. It is revealing that in June 2021, 33% of the business owners said they were earning the same monthly revenue, or more, compared to pre-Covid. However, in the most recent poll, the figure dropped to only 26% saying they are fully recovered.
The findings for retailers are particularly alarming. 59% indicated they are in danger of shutting down, 50% have decided to cut back on orders, and of that 50%, 38% are reducing orders by 20% or more. The "Retail Apocalypse" moniker hasn't resurfaced, but this could start a conversation.