Most Small Businesses Expect A Recession And Many Will Increase Marketing, Study Finds

• by Ray Schultz , October 7, 2022

Most small business owners expect a recession, and many are cutting back on expenses in a desperate bid to prepare for it, according to Is Your Business Ready for a Recession?, a study by Clarify Capital. 

Of the SMBs polled, 71% think a recession is near — 45% say it will hit before the end of this year. And 70% fear they will not survive it.  

But 46% will most likely increase marketing or sales in the next six months, while an equal percentage plan to increase their social media marketing. Another 43% say they will have to build online sales or websites. 

Cost-cutting will be critical, the companies state. Among their methods: 

• Buy less — 34% 
• Postpone or cancel renovations and/or investments (e.g., new equipment) — 32%
• Eliminate discretionary spending — 32%
• Adjust to a fully remote workplace — 27%
• Negotiate lower prices — 27%
• Increase marketing while cutting other costs — 24%
• Reduce professional fees (e.g., bookkeeping) — 25%
• Look for a cheaper credit card processing service — 23% 
• Shorten hours of operation — 22% 
• Downsize office space — 21%
• Cut back on insurance expenses — 19% 
• Renegotiate their lease or move — 19%
• Lay off employees — 19%
• Cut employee perks — 18% 

On average, business owners have lost 43% of their clients in the last six months.

Other probable plans include:

• Identify new supply chain options — 36%
• Identify potential markets for exporting goods or services — 32% 
• Make a capital expenditure — 30%
• Obtain financial assistance or additional capital — 29%
• Hire new employees — 29% 
• Cancel or postpone a planned capital expenditure — 28%
• Permanently close business — 22% 
• Pivot service offerings — 12% 

One more finding is that 61% have noticed quiet quitters on their staff.

 Clarify Capital surveyed 1,000 micro to medium-sized business owners.