File photo / Tim Greenway
Bill Williamson is president of Bank of America Maine
June 15, 2022
How small businesses can navigate inflation and supply-chain issues while growing revenue
By Bill Williamson, Bank of America
Small business owners in Maine and across the country are reporting inflation and supply chain disruptions are affecting their businesses in big ways.
Maine has over 150,000 small businesses employing 290,000 workers, which equates to 99.2% of Maine businesses and 56.8% of Maine employees, according to the U.S. Small Business Administration.
Bank of America’s research shows small business owners are facing market driven and operational challenges — inflation, supply chain issues and labor shortages.
Despite these difficulties, business confidence remains strong, with 64% anticipating their revenue will increase over the next 12 months.
Business owners are continuing to recover from the pandemic, with 62% saying their business has fully or partially recovered. Nearly half, 48%, cited increased consumer spending has been critical to their business’ recovery.
Economic concerns and challenges
Business owners are increasingly concerned about the impact of inflation, supply chain, and labor shortages, and these factors are leading them to make operational changes.
Eighty-eight percent of business owners say inflation is affecting their business, causing them to raise prices, reevaluate cash flow and spending for the year ahead, lose sales, reduce business costs and increase employee wages.
Not far behind inflation concerns, 76% of business owners say supply chain issues are also impacting their business, causing them to raise prices, struggle sourcing products and supplies, and delay delivery of goods and services.
Additionally, 41% of business owners say labor shortages are impacting their business, causing them to work more hours due to staff shortages, struggle to fill job openings, reduce the products and services they offer, raise wages, and lose customers.
How small businesses can respond
Though the market is difficult, small business owners can take action to mitigate these looming economic challenges. For example, business owners can increase prices relative to specific supply issues — rather than raising prices across the board — to avoid frustrating customers while still accounting for the impact of inflation and supply delays.
Knowing supply chain disruptions are likely to persist, entrepreneurs should review their networks and consider expanding to include multiple suppliers. Offering tools like loyalty programs, honest shipping estimates and accessible help lines are also key to standing out from competitors and keeping customers happy.
As talent shortages continue, business owners should focus on employee retainment. Offering competitive salaries is key, and other incentives like flexible hours can go a long way to keeping employees satisfied.
New and emerging technologies
Looking to the future, business owners believe new technologies will be critical to risk reduction and success.
Many business owners have already begun aggressively incorporating new technologies. Over the past 12 months, 70% of business owners have adopted new digital tools and strategies, including accepting more forms of cashless payments and banking more via online and mobile apps.
Longer-term, 44% of business owners plan to prioritize digital sales over brick and mortar, and many believe that cybersecurity and automation will be critical to success.
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Anonymous
June 15, 2022
Bank of America abandoned their small business owner customers during the PPP rollout in order to focus on saving their big business buddies. If you're a small business owner in Maine, there are plenty of local/regional banks that do actually support small business.
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