QuickBooks parent company, Intuit, commissioned surveys of 2,000 small businesses across the U.S. in 2021 to gauge their thinking as 2022 approaches. Survey findings were published as QuickBooks Small Business Insights and QuickBooks New Business Insights. Below are some of them.
Top small business priorities for 2022
Increasing online sales. 88 percent of small business owners say online sales will be an “important source of revenue next year.” Forty-two percent say they will become much more reliant on online sales in 2022.
Online sales is the number-one priority for U.S. small businesses. QuickBooks says revenue from social media currently accounts for 33 percent of small business revenue on average. Twelve percent of owners say they already get 100 percent of their revenue online. Brick-and-mortar businesses report getting 22 percent of their sales from social media.
Investing in technology. Ninety-seven percent of small business owners say digital technology will play an “important” role in their business over the next 12 months. Of these, 52 percent say they will become more reliant on digital technology in 2022. Eighty percent agree that they are mode likely to succeed if they invest in digital technology.
Fighting inflation. Ninety-seven percent of small business owners are “worried about inflation; 45 percent say “rising costs” is the most significant threat their businesses face; and 63 percent plan to raise prices in the next three months to combat this. Small business owners say expanding their customer base is another a key strategy to counter cost pressures.
Hiring/retaining talent. Forty-four percent of small businesses plan to hire over the next three months. Only 3 percent predict their workforce will shrink. Forty-four percent of business owners plan to increase pay to attract new talent; 46 percent plan to pay their current staff more; 36 percent say they will offer larger bonuses to current employees; 30 percent say they will hire younger workers.
Other priorities for small business owners are improving marketing results and developing new products and/or services.
Top priorities for small business startups in 2022
Survey results based on U.S. Census Bureau data show as many as 17 million new small businesses could be set up in 2022, smashing the 2020 record-high of 4.3 million startups. The top priorities for 2022 startups are:
Funding the business. Sixty-seven percent of entrepreneurs plan to fund their new business with personal savings and 49 percent will apply for a small business loan from a bank or financial institution.
Tracking expenses. Almost two in five entrepreneurs said tracking expenses (30 percent) and opening a back account (39 percent) will be among the first things they do when they start their business. Procuring accounting software is a key priority in this regard.
Setting up online. Fifty-seven percent of potential new entrepreneurs said they intend to spend more money at other small businesses over the next six months because they want to help local employers. Getting a logo, building a user-friendly website, and establishing social media accounts are critical steps.
Hiring employees. Thirty-three percent of future business owners who completed the survey say one of the first things they do when they start their business will be to hire employees
Other priorities are: Getting advice from experts; getting paid; and securing a patent.
Top five threats to small businesses in 2022
The economy. In an August 2021 survey, 60 percent of small business owners surveyed said they were optimistic about the economy, 21 percent expressed pessimism. Those numbers fell to 53 percent and rose to 28 percent, respectively, in a November survey.
Small businesses with fully integrated online and offline sales (known as “omni-channel” businesses) are the most upbeat about the economy. Sixty-eight percent of these expressed optimism.
Rising costs. One of the biggest threats small businesses currently face. The top three cost pressures are materials, shipping, and equipment — in that order. Labor costs are also a worry for many.
Supply chain problems. The challenge of higher shipping costs is compounded by the fact that 71 percent of small businesses have experienced supply chain problems this year. Of these, 38 percent expect these problems to continue, but the other 62% say their supply chain problems have already been resolved or that they expect them to be resolved soon
Xero, a small business accounting software platform, says due to challenges dealing with their supply chains this year, businesses plan to buy earlier than they had before. They also want to expand their supply chain to new suppliers and plan to have less inventory on hand.
Cash flow. Fifty-eight percent of small businesses have a cash flow problem. Twenty-seven percent say the top cause is low customer demand; 26 percent attribute it to costs rising too fast; and 9 percent blame unpaid invoices. Small business owners surveyed said low cash flow limits their ability to grow, take on new projects and make capital investments. Twenty-nine percent of small businesses with less than $50,000 in annual revenue are the most vulnerable.
Fifty-seven percent have less than six months of cash reserves and 26 percent of these have less than one month of reserves to cover their cists in an emergency.
Low-price competitors. Twenty-four percent of small businesses say low-price competitors are their biggest threat.