Small businesses play an important role in the American economy, both as employers and as drivers of economic activity in local communities. In recent years, however, small business owners have had to navigate multiple challenges, from the COVID-19 pandemic to rising inflation.
In 2022, small businesses across the Twelfth Federal Reserve District (which includes the nine western states—Alaska, Arizona, California, Hawai’i, Idaho, Nevada, Oregon, Utah, and Washington—plus American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands) reported that they were struggling with increased costs, hiring staff, and general financial conditions, specifically1:
- 61% of Twelfth District businesses cited supply chain issues as an operational challenge in the last 12 months, followed closely by hiring/retaining qualified staff (56%).
- Increased costs of goods, services, and/or wages was by far the top-cited financial challenge (noted by 80% of Twelfth District businesses).
- 64% of firms stated their current financial condition at the time of the survey was “poor” or “fair.”
This information comes from the Federal Reserve’s annual Small Business Credit Survey (SBCS). The SBCS is a national survey conducted through a collaboration of the 12 Federal Reserve Banks that collects data on small business financial needs, business performance, and emerging issues. Timely insights on the challenges business owners face when trying to grow and fund their firms is critical information for researchers, policymakers, and lenders.
When more business owners complete the survey, more in-depth analysis on business needs is possible. This information can help inform potential actions to support small businesses in the Twelfth Federal Reserve District and across the country. For example:
- Strong response rates in recent years have enabled the creation of Firms in Focus, a series of chartbooks presenting Small Business Credit Survey data across various business and owner demographic characteristics, as well as by state and metropolitan statistical area (MSA).
- Through Firms in Focus, users can easily compare data for employer firms within their state of interest to data for employer firms across the United States.
In 2022, the survey responses received allowed us to share state-level results for four western U.S. states—Arizona, California, Hawaii, and Washington. The goal for the 2023 survey is to receive enough responses from across the District to create state-level reports for every state and territory.
The survey is open now through November 17. Available in both English and Spanish, the survey takes approximately 10 minutes to complete. Help us elevate the voices of small businesses in your community by taking the survey today or sharing it with a small business you know!
Related:
- Small Business Credit Survey. 2023 Report on Employer Firms, Data Appendix File (Excel document, 695 kb): https://www.fedsmallbusiness.org/-/media/project/smallbizcredittenant/fedsmallbusinesssite/fedsmallbusiness/files/2023/sbcs-employer-firms-appendix-2022.xlsx?sc_lang=en&hash=9FD14DE2658629E8223878C983B7D121 ↩︎
The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.