Small Biz Outlook 2023

Small Business Expo in Cincinnati is in the rear view mirror, but those who attended were determined to make this a healthy business year, in spite of recent dark clouds. There’s one thing small business does well —we’re nimble and very bullish about our businesses.

Since 1973, the National Federation of Independent Business (NFIB) has tracked and recorded Small Business Economic trends via questionnaires mailed to their members. We thought it would be helpful to share a few of the numbers.

Of note for 2023 is their Small Business Optimism Index that shows an overall Index of 89, after their 49-year average of 98. The reason for the dark clouds? Inflation!

Stressed businessman looking at laptop screen in modern office.

While the survey tracks labor markets, capital spending, sales and inventories, compensation and earnings, borrowing and credit markets, inflation was what hit small business owners the hardest. 

This Inflation information should be informative for our readers to measure their performance compared to the rest of the small business world:

The net percent of owners raising average selling prices decreased 4 points from March to a net 33% seasonally adjusted, the lowest since March 2021. Unadjusted, 12% (up 1 point) reported lower average selling prices and 48% (down 2 points) reported higher average prices. 

Price hikes were most frequent in construction (59% higher, 7% lower), retail (59% higher, 8% lower), wholesale (54% higher, 14% lower), and finance (52% higher, 5% lower). 

A net 21% of small business owners plan price hikes (down 5%).

Consumer spending increased, but consumers were purchasing product from inventory made in prior quarters. Those small bank failures that made the news were not due to bad loans but to poor risk management! Even as the Government was pouring massive Covid relief into the economy, banks allowed those deposits to be withdrawn in 24 hours.

For those who enjoy tracking where your small business stands compared to other small businesses, read the entire report (Copyright NFIB Research Center publication: NFIB Small Business Economic Trends, April 2023).