The United States— and especially South Carolina— have experienced consistent and steady economic recovery following the COVID-19 recession that took place during the Spring of 2020. Yet 2022 brought with it a new set of challenges. To specifically identify the various new and ongoing issues faced by South Carolina businesses in the aftermath of the COVID-19 pandemic, the South Carolina Small Business Development Centers (SC SBDC), in partnership with the University of South Carolina Darla Moore School of Business, conducted a Small Business Needs Assessment Survey of its clients and those of partner organizations.
According to SC SBDC State Director Michele Abraham, the SC SBDC and its partners recognize the economic environment has changed since the pandemic and want to ensure they address their clients’ current and anticipated needs to provide maximum value to their small businesses. “The results of this survey provide us actionable data to determine effective strategies to assist small businesses throughout our state,” she said.
Established in 1979, the SC SBDC operates as a cohesive network advancing the state’s economic development by providing entrepreneurs at every stage of the business life cycle (from pre-venture and early-stage to established and mature) no-fee consulting services, affordable training programs, and access to an array of valuable resources. Over 99 percent of all firms located in South Carolina are considered, small businesses and, therefore, eligible to benefit from the organization’s array of service offerings.
Of the 853 survey responses received, most businesses considered hiring and retaining qualified staff and reaching customers/growing sales their largest operational challenges. Ensuring the health/safety of customers or employees and complying with government regulations were considered the least challenging.
Selected Key Findings of this Report
Among businesses that reported attempting to hire over the past 12 months, nearly 85 percent reported hiring as a major or minor challenge.
In response to these hiring challenges, most businesses report they have increased wages or monetary incentives. Others have had to increase the workload for existing employees or owners in the face of difficult hiring scenarios. Most have not changed hiring requirements or other non-wage compensation.
The primary financial challenge that small businesses report facing in 2022 is generating sufficient sales activity. Roughly 41.2 percent of survey respondents report weak sales as a major challenge, with wholesale & retail trade businesses most likely to be struggling in this area.
Approximately 77.4 percent of survey respondents report that inflation adversely impacted their business activity in 2022. This is especially true for businesses in finance and insurance, construction, and leisure and hospitality.
In response to high inflation, most respondents have seen an increase in input or material costs and have experienced a decrease in the profitability of their business. Many have raised the prices of their products or services as a result.
Most survey respondents are optimistic about 2023. Nearly 60 percent of all business respondents expect revenues to increase over the next 12 months, while about 43 percent expect to increase their employment levels.
When asked what signal economists are looking for to indicate the pandemic has passed, Research Economist at the Darla Moore School of Business and author of the Small Business Needs Assessment Survey, Joseph Von Nessen, is looking to next year. “I would like to see demand get pulled back to the extent that we can limit the high levels of inflation we’re seeing right now. I don’t think we’ll get there in 2023, but a steady movement downward towards two percent would be a successful outcome over the next year,” stated the economist. “ That would get us closer to a period where we could consider—from an economic perspective—that the pandemic is over.”
To publicize the results of its study and provide small business owners a platform for providing feedback, the SC SBDC is conducting its Resilience & Resurgence Tour: COVID’s 2nd Wave of Business Challenges, which kicked off Thursday, February 23, in Rock Hill at Winthrop University.
The SC SBDC also will be conducting this event in the following cities:
•Greenville: March 14
•Florence: April 4
•Charleston: April 18
•Columbia: April 21
For more information, visit SCSBDC.com.