With economic uncertainty and a recession looming on many business owners’ minds, more than 10,000 small business owners will assemble at the Small Business Summit (SBS) in Washington, D.C. this week.
The summit will give small business owners a face-to-face meeting with government officials who will attempt to address concerns over hiring challenges, supply chain pressures, and recession fears. The timing for the SBS could not be more opportune as the economic outlook over the next 12–18 months looks grim, with 93% of small business owners fearing an upcoming recession, according to a survey from Goldman Sachs.
Restaurant owner Alli Jarrett has operated Harold’s restaurant off of 19th Street in Houston since 2013, but with economic uncertainty immanent, Jarrett is bracing herself for the possibility of a recession. “It is looming, and I think the best thing we can do is try to work smart,” she said. Jarret wants to use the collective voice of small business owners to advocate not only for effective change but for themselves, staff members, and the families they feed.
Recession fears have been amplified by the universal labor shortage affecting small business owners, according to John Diamond, the director for public finance at Rice’s Baker Institute. “We’re facing unprecedented levels of inflation, and the Fed is committed to getting that inflation under control,” said Diamond. “They’re going to do that by producing slack in the economy, by raising interest rates.”
With many small businesses taking out loans to survive the 2020 pandemic shutdown, a pending recession is having these same business owners question whether taking on more debt is worth it. Having fewer options to cut expenses than larger corporations do, small businesses typically rely on business loans to remain open during market downcycles.
Diamond understands that small businesses make up a significant share of U.S. employment and that owners are the “engine for job growth” in the economy. “They’re going to make up about one-third of wages and one-third of employment,” said Diamond. “So, they are a significant share of the employment in the United States.”
Jarret also recognizes the real-life impact small business owners have on the economy. “That’s what small business is,” Jarret says. “We are job creators.”
When it comes to the challenges of being a business owner, she advises, “You just have to pull up your boots and not cry, and keep moving forward.”