- 5 days ago
- 7 min read
Updated: 5 days ago
With consumer prices up 3.4% and producer prices up 4.7% from a year ago, consumers and businesses alike are left wondering who will absorb the rising cost of supplies. Amid ongoing inflation, businesses that hesitate to raise their prices must cover the difference themselves or pass some of the cost on to customers, risking the loss of loyal clients in the process.
Moreover, a Goldman Sachs 10,000 Small Businesses Voices survey found that 81% of small business owners who applied for a loan or line of credit in the past year found it difficult to access affordable capital, and 49% have had to pause expansion plans as a result, even as 75% remain optimistic about their business's trajectory.
Modern small businesses face a shifting set of global challenges. Persistent inflation, new tariffs and ongoing trade policy uncertainty are reshaping how small businesses source goods, price products and plan for growth.
In this article, we will discuss some of the most pressing small business challenges today, look at what small business websites are doing to navigate them, and more.
Read also: how to spring clean your small business
Small business challenges
01. Understanding broader economic trends
The Federal Reserve now holds its benchmark interest rate at a range of 3.50% to 3.75%, a level that remains well above pre-pandemic norms even as inflation has cooled from its 2022 peak. According to the U.S. Chamber of Commerce and MetLife Small Business Index, 60% of small businesses have raised the price of their products or services in the past year due to inflation. While some businesses modified their inventory to save on costs, buying the minimum amount of items they can store, many business owners have drastically changed their business model to fit into the new economic order.
Supply chain disruption has become another challenge for small businesses, with 47% of business owners saying they’ve altered their supply chain in the past six months, as reported by the U.S. Chamber and MetLife Small Business Index. Empty grocery store shelves, insufficient supply of everyday items like refrigerators and delayed packages makes it difficult for them to meet customer demand.
The solution: To protect their future, small business owners need to recognize the larger forces at play, understanding how inflation affects small businesses as well as supply chain issues, labor shortages, rising energy costs and other small business trends, and understand what’s driving them. Wix user Avi Cohen, owner of Babu Chocolates, manages rising costs of his raw product by experimenting with new product offerings. He plays with flavors and uses an assortment of ingredients like different nuts so that he never loses quality when supplies are out of reach.
Additionally, honest communication between businesses and consumers might be the easiest way to navigate these broader challenges and could pay off in the long run.
Being upfront about price increases and explaining the reasons behind them can help small businesses maintain customer trust.
02. Finding customers without being a household name
For 60% of small business owners, finding new customers is their top marketing challenge, according to a survey by Ascend2 for Constant Contact. It's a small business myth that customers just show up. The process of finding new customers can be costly and specifically challenging for smaller businesses that do not have the same budget (and big name) as larger companies.
The solution: Small business owners, self creators and aspiring entrepreneurs have a few ways to attract new clients without being a household name. First, position yourself as an expert in your industry by creating a blog and publishing helpful content that demonstrates your knowledge to potential customers.
Second, optimize your small business website for search engines and further drive traffic and conversion. Along with using best practices like page speed optimization and designing for enhanced user experience, you will also want to track your success by monitoring the right key performance indicators (KPIs).
03. Increasing brand awareness
Explore what are the best customizable AI agent platforms.
Having a strong brand is important for growing a business. Increasing brand awareness is one part of that picture, resulting in building a loyal customer base who can recognize your brand instantly out of a lineup and also trust your business to meet their needs. In effect, 87% of consumers say that they would pay more for brands they trust, according to Salsify's Ecommerce Pulse Report. Small business owners and entrepreneurs can boost their brand awareness using their best marketing tool: their online eCommerce website, created with powerful eCommerce website builders.
The solution: Start by building an SEO strategy to bring more traffic to your site. This can really help with your business scalability. Then, create a professional and customized logo design with the Wix Logo Maker to feature on your website. On the content side, you can blog, start a podcast and share social media visuals such as infographics that show off your brand’s expertise.
Part of having a strong brand is a powerful business name and standing out from the get-go. If you're just starting your next venture, consider using a small business name generator for ideas and inspiration.
Learn What is an AI agent builder.
04. Workforce woes
Small business owners continue to face a persistent hiring challenge. According to NFIB's Jobs Report, 36% of small business owners have job openings they can't fill, and 27% cite labor quality or availability as their top business concern.
Finding skilled talent remains small business owners' biggest hiring challenge. According to a Robert Half survey, 47% of small business leaders say finding skilled talent has become harder than the year before, and only 12% say they currently have the talent needed to complete high-priority projects, even as 76% remain confident about their overall hiring outlook.
The solution: Some small businesses use online recruitment and employment agencies to address their own labor shortage. “Right now, we’re doing whatever we can to attract the workers that we need,” said Traci Tapani, co-president of Wyoming Machine, as reported by the US Chamber of Commerce.
05. Lack of capital and cash flow
Capital and cash flow are a lifeline, especially for those starting a business. According to the Federal Reserve's Small Business Credit Survey, about half of small businesses have their funding needs fully met, while roughly a third face a funding gap despite applying for financing.
The solution: Fortunately, there are different ways of obtaining funding, from Small Business Administration loans to private bank loans. The SBA offers a variety of loan programs to help small businesses, including 7(a) loans, 504 loans and microloans. Other methods of funding include finding an investor, venture capitalist or business partner, as well as crowdfunding online.
The next step is maintaining your bookkeeping and proper cash flow management to ensure enough cash reserves to cover business bills and generate profits. Without it, you may not be able to scale.
06. Marketing
Nearly half of small business owners handle all of their social media management on their own, according to Constant Contact. With smaller budgets than their big brand counterparts, small businesses need to be creative and resourceful about their digital marketing strategy, and many need an online presence to get there.
The solution: Choose from website plans like eCommerce, event website or portfolio for your type of business. Then, incorporate additional marketing features to enhance your website, including email marketing, SEO tools, analytics and different website apps from the Wix app market.
Many of the biggest small business challenges come down to the same root cause: too much manual work and not enough automation. Symphony by Wix is a multi-agent AI platform designed specifically for small business owners. Symphony by Wix coordinates multiple specialized agents across marketing, client communication and business operations at the same time. The result is a business that keeps moving without requiring you to be in every conversation and decision.
Learn more about Symphony by Wix:
07. Burnout
More workers report feeling burned out than they did the year before, according to MetLife's Employee Benefit Trends Study. The study found that 39% of the workforce feel burned out, up three percentage points from the previous year. Employees and employers alike continue to feel the strain of ongoing economic uncertainty on workplace well-being and productivity.
While being a small business owner can be rewarding, it can also be emotionally draining. When you’re "always on” for your business development, paired with the stresses of inflation, rising costs and economic uncertainty, it’s important to recognize the signs of burnout, as per the World Health Organization:
Feelings of energy depletion or exhaustion
Increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job
And reduced professional efficacy
The solution: Here are a few ways to beat ongoing stress, especially for business owners:
Invest in help to delegate tasks, such as accounting, updating the company website or marketing
“Close up shop” temporarily and recharge
Take time to celebrate victories, big or small, to keep a positive attitude
Keep up with the latest technology trends that can help streamline business operations, like AI (read about the top AI myths that might be holding your business back)
Small business challenges FAQ
What is the biggest challenge facing small businesses right now?
Inflation remains the top concern for most small business owners. U.S. Chamber of Commerce Small Business Index data shows 57% of small businesses currently cite inflation as their biggest challenge, ahead of revenue concerns and employee benefits.
How can a small business improve its cash flow?
Start by tightening up bookkeeping so you always know where your money is going. Beyond that, small businesses can explore SBA loans, lines of credit or outside investors to bridge gaps. Even so, the Federal Reserve's Small Business Credit Survey found that roughly a third of businesses still face a funding gap even after applying for financing.
How can a small business compete with bigger companies for customers?
You don't need a big-name budget to win customers, just a clear value proposition. Position yourself as an expert through content like blogging, optimize your website for search, and lean on brand trust. Salsify research found that 87% of shoppers will pay more for a product from a brand they trust.
Why is hiring so difficult for small businesses right now?
Many small business owners struggle to find qualified applicants, not just enough applicants. NFIB's Jobs Report found that 36% of small business owners currently have job openings they can't fill, with 27% citing labor quality or availability as their top business concern.
How can small business owners avoid burnout?
Delegate tasks where you can, whether that's bookkeeping, marketing or updating your website. Building in time to recharge and celebrate small wins also matters, and using tools like AI or automation can take repetitive work off your plate so you're not carrying everything alone.
