A new confidence has emerged among small-business owners despite the idea of a recession. (This outlook is revealed in the latest Small Business Recovery Report by Kabbage.)

In its sixth installment, the report tracks the recovery trends and growth outlook from polling 550 small-business leaders. For many, the pandemic resulted in a positive and persevering outlook of an uncertain economic future. Small-business owners stay confident, focusing on branding, marketing, adjusting for inflation and prioritizing online sales to beat competitors.

The survey’s data illustrate that most U.S. small businesses are expecting an economic recession, and they are considering its effect on them. While83% are concerned there will be a recession soon, 80% of businesses are confident they can withstand it.

For the respondents who are confident they can survive a recession, the pandemic was cited as the top reason (31%) they feel this way, saying it helped them find a greater sense of resilience and preparedness to be successful in the future despite economic turbulence.

As small businesses weigh a potential recession, they face economic hurdles such as inflation and supply chain disruptions. In the March 2022 Small Business Recovery Report, respondents reported increasing prices by an average of 21% across industries, largely due to increased costs from vendors (54%) and of raw materials (45%).

The new data show how inflation changes how small businesses manage their cash flow. Among those that applied for a line of credit this year or are planning to apply in the next six months, 46% said they will most likely use the additional capital to cover inflation costs.

Similarly, the report showed that more than half (53%) of small businesses expected their business to be affected by supply chain obstacles for the next three months to a year. The new report finds that supply chain disruptions continue to be an issue, with 24% of small businesses planning to use in-hand cash to cover costs due to supply chain shortages.

Given the market and its complexities, 45% of businesses are trying new competitive strategies compared with before the pandemic. This is particularly true among medium and large small-business respondents.

A combined 57% of medium and large and 29% of the smallest small businesses surveyed cited branding as their primary differentiator from competitors.

The latest Small Business Recovery Report showed a significant push around marketing among small businesses. A combined 44% of medium and large small businesses reported that their business is now marketing through social media and digital channels that are different from their competitors.

In the March 2021 Small Business Recovery Report, respondents said their monthly online sales made up, on average, 57% of total revenue. Now, with more time passed from the height of the pandemic, that number has slipped to 40%; however, new data show that some unexpected industries, like health care, have seen a boost in online sales, while others, such as hospitality, have seen a drop.

Thirty-six percent of health care-related companies stated they were not likely to receive most of their revenue online but have seen an increase in online sales since the pandemic.

Conversely, 32% of the hospitality companies stated they typically receive most of their revenue online but have seen online sales dip since the pandemic’s peak.

The recovery report shows small businesses continue to adapt and prioritize various strategies as market challenges remain constant. Whether it continues to be the pandemic, a potential recession or other issues, entrepreneurs will continue to seek a will and a way to survive and thrive.

Gina Taylor Cotter is executive vice president and general manager of U.S. Small Business Banking and Kabbage. She wrote this for InsideSources.com.

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