Running a small business in a down market
Four ways SMB owners are turning uncertainty into a growth opportunity
The pandemic was particularly challenging for small business owners. Those who were able to remain focused, agile and adaptable were more likely to weather what turned out to be a two-plus-year storm. Now, with the worst behind us, small and medium-size businesses (SMBs) are operating against a backdrop of macroeconomic uncertainty. Concerns around inflation, rising costs, supply chain issues and general market volatility dominate headlines almost daily, and impact businesses of all sizes to varying degrees. Even so, most SMBs are not letting the headlines hijack their entire strategy.
Over the past few weeks, we’ve had the chance to connect in-person with more than 200 small businesses across four markets in Des Moines, IA, Lehi, UT, Paterson, NJ, and Nashville, TN. By and large, SMBs in the U.S. are keeping their heads down, focusing on innovation and execution in the short term to set themselves up for growth over the longer term. And according to the Visa 2022 Small Business Pulse report,1 most SMB owners are largely optimistic about their future, despite the present reality of down market turbulence. Here are few key findings from the report and other Visa research that suggest small businesses are in it for the long haul, and by and large focusing on those factors within their control:
1. New businesses are still booming.
Small businesses are forming every day across the country — and at a rate that’s 31 percent higher than the rate of formation in 2019.2 Small business growth is particularly strong in the southern part of the country, with Mississippi, Alabama, and South Carolina currently outperforming most states and pre-pandemic averages.3
2. SMBs have digital on their minds.
The digital transformation continues to change the way businesses around the world operate, interact with customers, and accept payments. SMB owners are looking to take advantage of this shift by executing on key strategic priorities, particularly by reaching new customers through digital means (39%) and adding new revenue channels (31%).4
3. Long-term outlook wins over short-term fears.
Down markets can present huge opportunities. Taking advantage of them, though, takes a long-term outlook, particularly when the day-to-day is perhaps less than rosy. SMBs are following emerging trends closely, such as data privacy and security, improving customer experience with technology and creating sustainable operations, with nearly half already implementing these kinds of changes today, with an eye toward a digital-first future.5
4. A positive outlook ultimately reigns.
Most SMB owners (85%) reported that their financial situation was good or better than good while 69 percent reported having positive feelings about their business. Reported growth in 2021 (average increase of 8%) and projected growth in 2022 may contribute to this positivity. In fact, 62 percent of SMBs in the survey projected an average of 13 percent growth this year.6
Keep calm and carry on
Market uncertainty can be stressful and trying for businesses of all sizes. No matter your interpretation of current economic events (or your outlook for the coming months), panic at the headlines of the day is no recipe for success in any business. Small business owners who stay focused on priorities, execute on their strategies and maintain a long-term outlook will be best positioned on the other side of current market turbulence.
Learn more about how Visa is supporting small businesses in our Small Business Hub. For more on SMB sentiment in the United States, read the Visa 2022 Small Business Pulse report.
1 Study commissioned by Visa, based on a survey in March/April 2022 of 600 US businesses with up 100 employees
2 Visa Business and Economic Insights, Department of Labor and Department of Commerce
3 Visa Business and Economic Insights and Department of Commerce
4 Visa 2022 Small Business Pulse Report
5 Visa 2022 Small Business Pulse Report
6 Visa 2022 Small Business Pulse Report