How current economic uncertainty is shifting the demand for entrepreneurship — Tom Sullivan

According to the most recent MetLife and U.S. Chamber of Commerce Small company Index, inflation continues to be a top concern for small business owners. Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce, will share some of the highlights from the Index on today’s episode of the Small Business Show and provide a report on the state of the economy. 

The U.S. Chamber of Commerce is the world’s largest business organization. It’s members range from the small business and chamber of commerce across the country that support their communities to major industry associations, multinational corporations, and emerging, rapidly expanding industries that are reshaping the global economy. The U.S. Chamber of Commerce is an accountable partner, network, and advocate for everyone in the businesses they serve, aiding them in improving society and people’s lives.

Whereas, inflation from the Q1 index highlights inflation is still prevalent and has been listed as the top concern for small business owners for five consecutive years. But, Sullivan believes, “the confidence small businesses have in their own operations hasn’t dropped in the slightest.” Nevertheless, small businesses have always been resilient, by making it out of COVID, Sullivan asserts, “they’re ready for anything.”

“The index clearly shows that small businesses are powering through some very tough inflationary times.” — Tom Sullivan

“I do want to emphasize that the survey picks up a very important part of how small businesses operate. We know they have to be optimistic, but they’re not naive that small businesses are well aware of the current state of the economy,” Sullivan explains. The U.S. Chamber of Commerce Index this year has highlighted that small businesses are pulling back on planned investment for the coming year. Understand that the survey was conducted before the Silicon Valley banking crisis, which tells the chamber of commerce that small businesses are doing well, however with tough times on the horizon, they don’t want to be heavily in debt if a recession is to occur. 

For the last three years, the U.S. Chamber of Commerce has seen the largest number of new business applications. Because of previous data, those numbers highlight to the Chamber that a large percentage of those applications follow through with their business propositions. Sullivan mentions, there are two reasons for this: 

1. The first being the stimulus. With the amount of money that was pumped into the economy, there was never a catastrophic event to capitalize individuals out of their current employment to entrepreneurship. But, Sullivan believes, “the stimulus cash is part of the reason we saw the uptick in startups.”
2. The other reason, falls back on why people want to start a small business: Either they do it for survival, to put food on the table, to solve a problem and what we saw during the pandemic was nothing but. Entrepreneurship filled that void of providing solutions to all of those problems. 

For example, Tom Sullivan claims, “the data from that time period indicated those problems were resolved. Because UPS and FedEx can only transport so much, shipping, logistics, and warehouse services saw the first uptick.  But with everyone ordering online and working from home, it shifted the demand for home deliveries and entrepreneurship filled that gap.