It should be no surprise that inflation is the top concern for small business owners. According to the most recent data from the Bureau of Labor Statistics, consumer prices are up 8.5% from July 2021 to July 2022.
More than one-third (35%) of business owners said inflation was their biggest worry, according to a Forbes Advisor survey of small business owners. But that’s not all they’re worried about. Taxes (10%), product shortages (8%), rent (5%), and staffing (5%) were among the top concerns for small business owners.
Despite the many challenges that business owners face, most business owners have no regrets about starting their own businesses. In fact, many business owners have a plan to help safeguard their businesses against financially devastating accidents and lawsuits.
What is your biggest worry about your business?
| Top concerns about your business | % of respondents |
| Inflation | 35% |
| Taxes | 10% |
| Product shortages | 8% |
| Ability to hire staff | 5% |
| Cost of rent | 5% |
| Equipment breakdowns | 5% |
| Severe weather that affects business | 5% |
| Having adequate insurance for my business | 3% |
| Providing health insurance for employees | 3% |
| Theft in business | 2% |
| None of the above | 15% |
| Not sure | 4% |
Covid Took a Big Bite Out of the Bottom Line
Small business owners particularly felt the rippling effects of Covid. Over one-third (35%) said their revenue is lower than pre-Covid. Only 23% reported higher revenue than pre-Covid, while 26% said their revenue remained the same.
How is your business compared to pre-Covid revenue levels?
| Business revenue pre-Covid | % of respondents |
| My revenue is lower than pre-Covid | 35% |
| My revenue is the same as pre-Covid | 26% |
| My revenue is higher than pre-Covid | 23% |
| My business started during Covid | 10% |
| Don’t know/Prefer not to answer | 5% |
Most Small Business Owners Have Skipped a Paycheck
Most business owners have sacrificed their paychecks to keep the lights on. More than half (64%) said they had not paid themselves a salary to keep their small business operating. One-third (33%) said they frequently do not pay themselves a salary, and 31% said they occasionally skip their paychecks. Only 32% of business owners said they haven’t had to give up a salary to keep their business running.
Small business owners in Western states were more likely not to pay themselves a salary. More than three-quarters (76%) said they either frequently or occasionally skipped a paycheck to keep their business operating.
The percentage of owners who did not pay themselves frequently or occasionally was similar among the other regions:
- 63% of small business owners in the Midwest have given up a salary
- 62% of small business owners in the Northeast have given up a salary
- 61% of small business owners in the Southwest have given up a salary
- 60% of small business owners in the Southeast have given up a salary
Most Business Owners are Worried About Business Survival
When asked about the future of their business, half (50%) of business owners surveyed expressed concern about their business’s survival. Some business owners were worried they wouldn’t make it another six months (17%), and 13% said they feared their business wouldn’t survive another year.
Nearly one-third (32%) had a more optimistic view and said they are not worried about the future of their business. But this sense of optimism is split among generational lines. Baby boomers were likelier not to worry about their business’s future.
Percentage of business owners not worried about their business’s future by generation
| Generation | % of respondents |
| Baby boomers | 45% |
| Millennials | 31% |
| Generation X | 30% |
| Generation Z | 16% |
Many Business Owners Say They Have No Regrets and Plan to Buy More Business Insurance
Despite the host of challenges that affect small businesses, only 24% of business owners said they have regrets starting their own small business. And many business owners have plans to shore up financial vulnerabilities by purchasing business insurance.
While more than half (61%) of business owners said they have enough small business insurance, many business owners said they are looking to add more types of business insurance to cover gaps in their coverage.
For example, more than one-third (36%) of business owners said they plan to buy general liability insurance. This core coverage type pays for property damage and injuries accidentally caused to others (like a customer who trips and falls in your store). It also covers the cost of your legal defense, judgments and settlements if you are sued because of an accident.
Mistakes happen during the course of business, and 21% of business owners said they plan to buy professional liability insurance (also called errors and omissions insurance). This pays for claims that your business made a professional mistake, like inaccurate advice to clients or violation of good faith and negligence. It’s a good coverage type for businesses like accountants, consultants, graphic designers, real estate agents, and technology professionals.
A good place to start with a business insurance plan is with a business owner’s policy (BOP). A BOP bundles together three essential coverage types: General liability insurance, commercial property insurance, and business interruption insurance. You can add more coverage types to your policy to fill in gaps, like workers compensation insurance or commercial auto insurance if you have a company vehicle.
If you’re not sure what coverage types are a good fit for your business, you should speak with an independent insurance agent who can help you identify the right coverage types. An independent agent can also compare business insurance quotes among several different companies to find the best price.
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Methodology
This online survey of 500 U.S. adults was commissioned by Forbes Advisor and conducted by market research company OnePoll, in accordance with the Market Research Society’s code of conduct. A small business was defined as a company employing 500 or fewer people. Data was collected July 1-5, 2022. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, which is a member of the MRS and has a corporate membership with the American Association for Public Opinion Research (AAPOR).
About the author
Jason Metz is a Deputy Editor for Forbes Advisor who previously worked in the insurance industry. As a former claims handler and fraud investigator, he’s seen a lot and enjoys helping others navigate the complexities and opaqueness of insurance.
By Jason Metz, Forbes Advisor