According to the small business recovery report by American Express and Kabbage, US small business revenues rose by 87% on average between July 2021 and July 2022, but profits declined by 4% in the same period. Inflationary pressures are to blame for this and more than half of the respondents believe inflation will continue to play a major role at least until summer of 2023.
More than a third of small business owners are raising their prices, some are trying to negotiate with their suppliers and some are removing lower-margin products and services to combat the inflationary pressures. Investing in customer relations and enhancing customer loyalty is one way that some small businesses are looking to drive revenue growth during this time.
Inflation is affecting everyone and small businesses are looking for innovative ways to gain market share, and grow their customer base. Nearly half of survey respondents said they had increased their digital marketing budget this year.
It’s time to fine tune your business practices, look for innovative ways to manage your cash flow, grow your customer loyalty base and attract new customers. It’s time to adjust not only to survive, but to flourish during these challenging economic times.
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