Small businesses have several crisis situations over the past two years, including cyberattacks, labor shortages, the Great Resignation and Covid. In response to the challenges posed by the pandemic, many companies made important decisions about their budgets, spending priorities, resources and strategies.
A new survey released today by UpCity, a small business intelligence firm, shows how 600 of those business owners in the U.S. and Canada reacted to the Covid crisis and the decisions they have made about their spending priorities for 2022.
Given the millions of small businesses that are headquartered in the two countries, those decisions can have powerful and long-lasting ripple effects.
57% cut their spending during Covid.
34% increased their employee’s pay; 34% of those businesses also expanded their health benefit options, including mental health benefits.
28% allocated most of their budgets to marketing and advertising pre-Covid; post-Covid, 27% of respondents are focusing their budgets most heavily on operations management.
27% increased their budget for software and tools for 2022.
The survey was conducted in January 2022 by Pollfish for UpCity and has a margin of error of 4%.
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UpCity noted that, “The pandemic has been a wake-up call for not just the workforce, but also business owners. While many businesses were helped by government programs such as the Paycheck Protection Program, not every small business was covered by the PPP, and therefore it was difficult to maintain payroll and staffing when many businesses had little to no revenue coming in.
“While layoffs were common, many businesses understood the human element involved and worked as hard as they could to maintain their staffs and adjust policies to meet their needs.”
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UpCity CEO Dan Olson observed that, “It wasn’t too surprising to see a majority of small businesses pulling back spending since March 2020, but starting to look to increase spending in the coming year.
What was somewhat surprising were the areas of increased spend[ing] that were identified —only 13% of respondents identified HR Benefits and Payroll as an area of focus in 2022. Given the Great Resignation, we would have thought there would have been a higher number of respondents looking to invest more in this area in order to retain employees via additional pay and benefits.
Advice For Small Business Owners
Olson said that, “… while we know small businesses are likely a bit shell shocked from the events of the past year and a half, it’s still important to invest in your company going forward.
“In particular, investing in your people has been and will continue to be an important area… as the demand for talent continues to increase. These investments don’t have to only be salary increases, but can also include increased employee benefits and expanding a culture budget for events and activities,” he concluded.
Of course, the impact of the pandemic on budget priorities is not the only Covid-related issue that small business owners have had to worry about.
Covid had a devastating impact on many small businesses, forcing hundreds of thousands of them to shut down. And then there is the impact the disease has had on small business owners.
A recent survey from Capital One Business found that many of the owners are exhausted. And for good reason.
According to the company, the survey found that “small business owners are acutely feeling the impact on their mental well being and their ability to maintain work-life balance as a result of navigating pandemic-related disruptions and fluctuating mandates across the country for nearly two years.
42% of small business owners have reported recently experiencing burnout.
The burnout is disproportionately affecting the nation’s minority business owners. Sixty-two percent of them reported that they recently experienced burnout, and nearly a quarter have experienced almost constant mental exhaustion.
More than half (52%) of the business owners have not taken a vacation in the past year.
Many report that they feel run down and mentally exhausted, with 62% of business owners reporting having worked longer hours.
Impact On Mental Well-Being
45% of business owners report that running a business during the pandemic has had a negative impact on their mental well-being.
A third said they weren’t able to get proper sleep.
More than a quarter (26%) of business owners report that their work-life balance is worse compared to before the pandemic.