Black businesses survived COVID, they can weather a recession
Black business owners with small companies are surprisingly optimistic about 2023 although many economists predict monetary challenges. According to the JPMorgan Chase 2023 Business Leaders Outlook survey, even with expectation of a recession by 55% of the respondents, 79% of Black business owners anticipate a performance that is 7% better than last year.
Every January, efficient business managers prepare their strategies for the coming year. Even if their companies operate on a fiscal year that doesn’t run from January through December, they will determine how the major economic information provided for the calendar year will influence their business results. JPMorgan Chase, America’s largest bank, provides economic information every year to assist businesses with their annual planning process.
The JPMorgan Chase report found that 45% of small businesses, more than twice the number last year, perceive inflation as a threat but are taking administrative steps to counter the problem. Some 68% of small businesses have been forced to raise some prices for products and services to offset the increase in employee and supply chain cost increases that affect 94% of small businesses.
According to Ginger Chambless, head of research, JPMorgan Commercial Banking, “small businesses remain more optimistic in their economic outlooks than midsize business leaders.” In the recent survey, small businesses had revenues between $100,000 and $20,000,000 per year.
One explanation of the optimism uncovered in the JP Morgan Survey is that many responders had already survived the cataclysmic results of the pandemic. According to Clair Kramer Mills, assistant vice president of the New York Federal Reserve Bank, the failure rate of Black-owned business was twice as high as other businesses during the pandemic.
According to the Fed report, 40% of Black-owned businesses are located in just 30 counties throughout the country. About 15% to 20% of Black businesses received Paycheck Protection Program loans to counter losses created by the pandemic.
Those who survived will be highly motivated to implement those business measures necessary for growth. Those Black business leaders are undoubtedly confident that with solid banking support they will prosper in 2023.