PROVIDENCE – After hopes that a return to normalcy was on the horizon during early summer, many small businesses are growing increasingly concerned about their futures as the COVID-19 pandemic continues to grip the country.
According to a national survey released on Tuesday by Goldman Sachs 10,000 Small Businesses Voices, just 38% of respondents, including some Rhode Island businesses, said they “believe the country is moving in the right direction,” down from 67% in June.
In the survey of 1,145 Goldman Sachs 10,000 Small Businesses participants, most respondents reported concerns relating to finances, staffing, mental health and child care among workers. Challenges were particularly prominent for Black-owned small businesses, the survey found.
Rhode Island largely reflects the survey’s broader trends, according to Jane Moffat, Northeast regional director of Goldman Sachs 10,000 Small Businesses Voices.
“Small-business owners across Rhode Island continue to face barriers on the road to recovery, from inflation to rising operating costs and other workforce challenges,” Moffat said. “Today’s survey results show that while small businesses are persevering, they continue to face one challenge after another.”
Most businesses harbor financial worries: 86% of respondents said they are concerned about inflation, 81% said inflationary pressures have increased since June and 84% saw an increase in operating costs.
Additionally, 74% are concerned that rising infection rates will negatively impact their businesses.
The survey results did not come as a surprise for Cathryn Kennedy, director of dairy operations and sales at Wright’s Dairy Farm & Bakery in North Smithfield, with the farm sharing the concerns most respondents expressed.
“Pretty much costs across the board have gone up,” Kennedy said, and staffing has been “a huge challenge.” At the moment, the company has around 20 open positions at a time when it ideally has all hands on deck in preparation for the holiday rush.
These financial concerns are partially driven by inflated costs of regular goods such as ingredients and packaging, according to Kennedy. The business has also raised its wages as it attempts to attract workers to unfilled positions, and with the diminished staff size, “our overtime is through the roof right now,” Kennedy added.
While strong sales at Wright’s Farm have enabled the business to stay afloat, hiring challenges to meet this demand have pushed the business to its limits.
Most other respondents also reported hiring difficulties. According to the survey, 73% of small-business owners are hiring, but 87% of those employers have difficulty attracting qualified candidates. For 80% of respondents, this difficulty impacts their bottom line.
Mental health challenges have also burdened employees, according to nearly half of respondents: 49% of small-business owners said their employees have experienced mental health issues due to COVID-19, while just 19% said they can afford to provide adequate mental health resources.
Kennedy also noted these problems at Wright’s Farm.
“At this point everyone is putting in so many hours that we’re starting to see burnout in the staff,” Kennedy said, “so that’s another thing we’re focusing on: How do we help our employees who have been with us through all of this?”
The survey also noted concerns about a return to remote learning, with 44% of respondents indicating that going back to remote education would make employee retention more difficult.
Overall, 64% of respondents said that workplace challenges have increased compared with prior to the pandemic.
Black-owned businesses face elevated challenges compared in terms of finances and recovering to pre-pandemic baselines, according to the survey. Fifty-four percent of Black-owned small businesses said they expected they would need to take out a loan or credit line in the fall or winter, compared with 29% of overall respondents.
Additionally, 51% of Black-owned businesses reported that they have less than three months of cash reserves for emergency measures, compared with 44% of overall respondents.
Like 92% of survey respondents, Kennedy believes the Biden administration should prioritize policies that help small businesses.
“I would love to see some kind of subsidies for small businesses to be able to pay a higher minimum wage so we can actually be competitive with larger corporations,” Kennedy said.
But the future remains uncertain, Kennedy noted, echoing most of the survey respondents.
“I’m not really sure where we’re headed as a country,” she said, “and what’s going on with COVID.”
Jacquelyn Voghel is a PBN staff writer. You may reach her at Voghel@PBN.com.
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