May 8, 2024 - Business

Small biz owners worried about inflation but happy to be entrepreneurs

Small business owners are as preoccupied with stubborn inflation and economic uncertainty as the general public, yet many still embrace entrepreneurship — warts and all.

Why it matters: A slowing economy and stubbornly high prices have exposed a growing divide between Wall Street and Main Street.

  • Major benchmarks are close to record highs, yet small business sentiment has been far less buoyant ahead of November's hotly-contested elections.

Driving the news: American Express' latest small biz survey found that Main Street is struggling to navigate multiplying economic headaches, with price hikes and cash flow topping their list of concerns.

  • However, a whopping 95% remain "overwhelmingly happy" as business owners, and are in it for the long haul, according to Amex data shared exclusively with Axios.
  • About 60% expect their business to be a long-term venture that lasts at least five years, Amex notes. Nearly half see longevity as a long-term objective. Meanwhile, 84% are motivated by personal passion, the data found.

Between the lines: A separate survey from Goldman Sachs, released last week, revealed that small business owners feel as if politicians aren't talking enough about Main Street entrepreneurs.

  • According to Goldman, a staggering 81% of 10,000 surveyed cited rising labor costs as having a "significant impact" on their business decisions.
  • Over two-thirds also cited insurance and goods costs as an impediment.

Yes, but: Amex's trend data makes clear that small biz owners are still embracing their roles with gusto.

  • Gina Taylor Cotter, American Express EVP & GM, Small Business Products & Business Blueprint, tells Axios that despite the pessimism that defines Millennials and Gen Z, younger entrepreneurs are more inclined to strike out on their own — and the omnipresence of technology has made them savvier business people.

What they're saying: "We are seeing a surprising generational shift that I've not seen elsewhere: while Gen Xers and boomers surveyed were most likely to have started their company as a 'second act' in their career, millennials and Gen-Zers are more likely to start their business right out of school," Cotter says.

  • "Younger generations are learning from the small businesses online or on their feeds, not just the small businesses in their neighborhood."
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