Small Businesses Optimistic for 2022, Survey Shows
The fifth annual survey by the Alaska Small Business Development Center (SBDC) at UAA finds a more positive attitude among business owners, compared to the challenges of the last two years.
Wary of Supply and Inflation Problems
Where the 2021 survey found 80 percent of business owners cited pandemic-related issues as a major problem for the upcoming year, that number has fallen to 45 percent for 2022. That makes it the second most urgent concern for small businesses.
The new top concern is supply chain and shipping costs. Half of businesses surveyed identified that as a top concern for 2022, compared to just 5 percent with that answer in the first survey in 2017.
Inflation and the rising cost of goods is now among top concerns for the first time in the survey’s short history, second only to pandemic concerns. The condition of the state and local economies has dropped to the least concern.
The SBDC survey is generally more optimistic than the last two years. Wholesalers, warehouses, and transporters are among the most optimistic of the industries surveyed. Tourism, arts, and educational services have the poorest outlook for the next year’s financial situation. Even so, 89 percent of tourism businesses plan to hire more employees in the next twelve months, the highest of any sector.
Finding employees to hire is one of the hurdles to overcome in 2022. The survey shows most businesses find hiring to be somewhat difficult or very difficult. The Kenai Peninsula has the highest “very difficult” response, with 43 percent, and only 4 percent of respondents in that region say new employees will not be difficult to find. Ketchikan had the highest rate of “not difficult,” with 17 percent.
The survey shows businesses expect to have a harder time securing financing. Previous surveys showed more than 60 percent of businesses were successful obtaining capital in the last two years, up from barely 50 percent in 2018 and 2019, partly thanks to relief programs. With those pandemic-related funds drying up, 60 percent of those surveyed expect to have more difficulty raising capital—to pay for inventory, equipment, staffing, or marketing—compared to just 9 percent who see little difficulty.
The SBDC survey received 691 responses from small business owners in eighty-nine communities statewide, across twenty-four industries.